Information Team Croydon
Digital Services
Assistant Chief Executive Directorate
Bernard Wetherill House
7th Floor, Zone B
Croydon
CR0 1EA

Contact: Information Team
[email address]

NOTE: Please do not edit the subject line when replying to this email. If
you have a processing request, please ensure you quote that reference in
your emails to us.

Dear Joel M Benjamin

Freedom of information request - FOI/11197

Subject: Freedom of Information request - Updates to risk register, ISS,
investment consultant & A.M mandates since publication of critical reports
on climate scenario analysis?

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Kind Regard

Information Management Team

Croydon Digital Services

Assistant Chief Executive Directorate

7th Floor, Zone B

Bernard Weatherill House

8 Mint Walk

Croydon CR0 1EA

Information Team Croydon
Digital Services
Assistant Chief Executive Directorate
Bernard Wetherill House
7th Floor, Zone B
Croydon
CR0 1EA

Contact: Information Team
[email address]

NOTE: Please do not edit the subject line when replying to this email. If
you have a processing request, please ensure you quote that reference in
your emails to us.

Dear Joel M Benjamin

FOI/11197

Subject: Freedom of Information request - Updates to risk register, ISS,
investment consultant & A.M mandates since publication of critical reports
on climate scenario analysis?

Thank you for your e-mail. Please accept our apologies for the delay in
responding to you. 

We can confirm that the relevant service who hold this information are
working on your request and are aware of the urgency and that it is now
overdue.  We are monitoring its progress and as soon as we receive this
information from them we forward this onto you. 

Should we have any further delays we will keep you informed.

Further information about your rights to information is available from the
Information Commissioner's Office at www.ico.org.uk

Kind Regard

Information Management Team

Croydon Digital Services

Assistant Chief Executive Directorate

7th Floor, Zone B

Bernard Weatherill House

8 Mint Walk

Croydon CR0 1EA

Information Team Croydon
Digital Services
Assistant Chief Executive Directorate
Bernard Wetherill House
7th Floor, Zone B
Croydon
CR0 1EA

Contact: Information Team
[email address]

Dear Joel M Benjamin

Request FOI/11197

Freedom of Information Request

Your request has been considered under the provisions of the Freedom of
Information Act. Please accept our apologies for the delay in responding
to you. Specifically, you have requested the following information:
 

 1. If/how youve updated internal risk registers to reflect physical
climate risks not being adequately priced/forecast? due to the
exclusion of tipping points and other known limitations?

The investment risk of climate change is recognised in the Fund’s risk
register which is considered several times each year by the Pension
Committee. We consider that it has a high likelihood of occurring and our
most recent comments (March 2025) are as follows:

Existing controls
When setting the funding strategy the Fund included climate scenario
stress testing in the contribution modelling exercise for the Council at
the 2022 valuation. The results provided some assurance that the funding
strategy is resilient to climate risks. The Fund agreed a revised
Investment Strategy Statement and Responsible Investment Policy at the
September 2023 Committee meeting.

Future controls
The Fund will implement the Task Force For Climate Change Disclosures when
required by legislation. This will enable the Fund to monitor and take
action to mitigate risks arising from Climate Change.
 

 2. If/ how investment consultants you engage with have updated their
models to include climate tipping points following expert and member
criticisms since 2023?

To assist in our understanding of the paper published by the Institute and
Faculty of Actuaries and the University of Exeter our Committee and
officers receive professional advice from Mercer, our Investment Adviser.
Specifically we have knowledge of a short paper produced by Mercer which
can be accessed  via  [1]A tipping     point for climate scenarios, we
have training provided by them and recognise their specific credentials
which, on this topic, they summarise as:

Mercer has been providing quantitative climate scenario analysis for
pension schemes since 2010 and we introduced longevity climate scenario
analysis in 2023.

Around our Committee meeting in September 2024, we had presentations from
Mercer and the London CIV on Climate Risk Management which, inter alia,
covered the TCFD framework and, specifically, the following:

• Improve climate-related data quality
• Provide a consistent framework for comparison
• Enable more informed decisions
• Increase focus on climate change risks and opportunities

We are currently considering how to take these matters forward
 

 3.  Have you updated investment strategy statements & other related
investment policy documents to reflect growing physical climate risks?

Investment Strategy Statement

A major component of the management of our Fund is the regular updating of
our Investment Strategy Statement. The current version was agreed by the
Pension Committee on 19 September 2023 and included as, Section 6, are
various commitments/statements in respect of “Environmental, Social and
Governance” matters. Specifically, as paragraph 6.8 we state:

6.8 The Fund believes that climate change presents financial risks to the
Fund over the short, medium and long-term and that the Fund should better
understand and mitigate where possible.

Responsible Investment Policy

Expanding on the points made in the Investment Strategy Statement, and as
agreed by the Committee in September 2023, is our “Responsible Investment
Policy” which can be accessed via:
[2]responsible-investment-policy-september-2023.pdf

In the first paragraph we discuss climate change in the context of it
being “financially material to the Fund both in terms of opportunities and
risks.” These themes are expanded upon throughout the document which, on
page 3 includes the following:
The Fund believes that climate change presents financial risks to the Fund
over the short, medium and long-term and that the Fund should better
understand and mitigate where possible.

On page 5 we say:
Climate Change
The Fund recognises the systemic risk associated with climate change as
well as the Council’s targets in this regard and the views and aspirations
of other scheme employers and scheme members.

The Committee supports the objectives of the Paris Agreement and believes
that keeping global temperature rises well below 2oC relative to
pre-industrial levels is entirely consistent with the Fiduciary duty of
the Fund.

The Committee intend to undertake further work to identify and manage
climate related risks. The Fund will be undertaking further training on
Fund specific net zero objectives and how they can be achieved. The Fund
will consider the appropriateness of climate change scenario analysis in
order to understand the climate impact on return at the total Fund and
asset class level across different warming scenarios and help the Fund to
further its decision-making.

The Fund is working with advisers to understand what would be required
with regards to the Department for Levelling Up, Housing and Communities’
(DLUHC) reporting of Climate Risk recommendations that are expected to
become mandatory for LGPS Funds in the coming years

On page 6 we say, further:

Climate change
The Fund is assessing the implications of reporting in line with the
Financial Stability Board’s Task Force on Climate-related Financial
Disclosures (“TCFD”) framework across the four pillars of Governance,
Strategy, Risk Management, Metrics and Targets.
The Fund will be undertaking further training on Fund specific net zero
objectives and how they can be achieved.

The London CIV has committed to become a net zero entity by 2040 in line
with the Paris Agreement objectives to limit global temperature rise below
1.5°C. It will also become a net zero company across operational and
supply chain emissions as early as 2025. More information on this
initiative can be found on the London CIV website
([3]https://londonciv.org.uk/).

Finally, on page 7 we say::

Climate change
The Fund is committed to developing its reporting in this area, including
with regards to carbon footprinting (for example, carbon intensity, fossil
fuel reserves and potential emissions) and scenario analysis, where
appropriate.

The Fund is working with advisers to understand what would be required
with regards to the Department for Levelling Up, Housing and Communities’
(DLUHC) reporting of Climate Risk recommendations that are expected to
become mandatory for LGPS Funds in the coming years. The reporting of
carbon exposures in investment portfolios is a relatively new development
and as such not all investment managers provide data on a comparable
basis.

The Fund will consider the appropriateness of climate change scenario
analysis in order to understand the climate impact on return at the total
Fund and asset class level across different warming scenarios and help the
Fund to further its decision-making.
 

 4. Have you discussed climate risk modelling flaws/limitations at the
pension fund committee since the 2023/24 report publications? and if
so have you changed your approach to correct for them?

As referenced above climate risk has been discussed by our Pension
Committee on several occasions and risk modelling flaws/limitations may
well have been mentioned. However, we have no written record of this.

5.  Have you reviewed/ updated investment consultant procurement briefs/
mandates to include tipping points & reflect/ help manage mounting
physical climate risks since July 2023?

No.

6. Have you reviewed/ updated AM mandates to reflect/ help manage mounting
physical climate risks since July 2023?

No.

7. In your experience, have Asset Managers meaningfully changed where and
how they invest on your members behalf - based on investment consultants
climate scenario analysis modelling outputs? If so how? - providing
relevant examples.

A significant portion of our investment portfolio is managed by the London
CIV which has committed to become a net zero entity by 2040 in line with
the Paris Agreement objectives to limit global temperature rise below
1.5°C. It will also become a net zero company across operational and
supply chain emissions as early as 2025. More information on this
initiative can be found on the London CIV website
([4]https://londonciv.org.uk/).

The Council publishes Access to Information requests and responses on its
online Disclosure Log. (Any request included within this log will be
anonymised appropriately)

To view the Council’s Disclosure Log, please visit our website available
here:

[5]The Freedom of Information (FOI) Act | Croydon Council
(disclosure-log.co.uk)

If you are dissatisfied with the way the Council has handled your request
under the Freedom of Information Act you may ask for an internal review. 
This should be submitted to us within 40 working days of this response. 
You can do this by outlining the details of your complaint by:

Email:        [email address]

Writing:     Information Team
London Borough of Croydon
Bernard Weatherill House
3^rd Floor - Zone E
8 Mint Walk
Croydon CR0 1EA

Any requests received after the 40 working day time limit will be
considered only at the discretion of the council.

If you are not content with the outcome of the internal review, you have
the right to apply directly to the Information Commissioner for a
decision. The Information Commissioner can be contacted at:

Information Commissioner’s Office
Wycliffe House
Water Lane
Wilmslow
Cheshire   SK9 5AF

Yours sincerely 

Croydon Council

References

Visible links
1. https://www.mercer.com/en-gb/insights/in...
2. https://www.croydonpensionscheme.org/med...
3. https://londonciv.org.uk/
4. https://londonciv.org.uk/
5. https://croydon.disclosure-log.co.uk/