Carbon Bubble Risk, Pension Fund Fiduciary Duty & Risks To Local Taxpayers Through LGPS Underfunding and Exposure to Investment Losses in Defined Benefit Schemes

The request was partially successful.

Dear Hackney Borough Council,

The Bank of England, HSBC, Citi Bank, Mercers, and the World Bank are clear that climate change is a major and growing financial issue. Bank of England Governor Mark Carney has said that climate change poses physical, liability and transition risks, which are all increasing.

Therefore, carbon bubble risk is now a clear material financial risk, and it is in the best interests of pension fund members to have regard to and actively manage, financial risks posed by climate change.

Additionally, as the individual ensuring compliance with SIP documents and signing off on the pension fund annual accounts, the s151 officer has a fiduciary duty to local taxpayers - who would ultimately be required to bail out the defined benefit LGPS fund, in the event of significant losses suffered in carbon markets, should the LGPS fund not manage carbon risk prudently.

We are therefore requesting the Pension Fund/ Committee/ Board would set out the appropriate response of the fund to the following questions:

(1) Please provide the two most recent versions of the Statement of Investment Principles (SIP)
(2) Will the fund be reviewing its SIP documents to pursue best practice and review carbon risk management and investment mandates in advance of LGPS pooling? If so when?
(3) Please provide current contract and procurement documents for the Investment Adviser(s) to the Pension Fund Committee.
(4) Please provide current procurement and contract documentation for the external fund manager(s) as set out in investment management agreements.
(5) Please provide a list of compliance breaches identified by the Head of Finance/ s.151 officer and brought to the attention of the Pension Fund Committee, during the last three (3) financial years.
(6) What steps have the Pension Fund Committee and Board taken to address the financial risks posed by climate change?
(7) Since the December 2015 Paris COP agreement, Peabody bankruptcy, and Exxon Mobil downgrade, has the pension fund changed its approach to climate change risks and investment in carbon stocks?
(8) Please provide Pension Fund Committee and Board meeting minutes where climate change, and carbon bubble investment risk was discussed, and minuted 2014 - 2016.
(9) Have you surveyed or formally consulted with your individual members or employers for their views on your ESG policies or practices in the last 10 years?
(10) How much does the fund spend on ESG engagement services and can you give any examples of engagement activities relating to climate change/carbon risk from the last 10 years?

We are asking these questions to understand how/ if UK local authority pensions funds fiduciary duties are being met in regard to climate change related financial risks - and to appraise financial risks to taxpayers in situations where fiduciary duty to manage carbon investment risk has been breached.

Yours faithfully,

Joel M Benjamin

Hackney Borough Council

[1]London Borough of Hackney logo

Dear Mr Benjamin,

FOI Ref: FOI16-1031-10328

Thank you for submitting a Freedom of Information request. Your reference
number is FOI16-1031-10328.

Your request will be responded to within 20 working days.

Yours sincerely,

Information Management Team - FOI

[2][email address]

The contents of this email are confidential to the intended recipient at
the email address to which it has been addressed. It may not be disclosed
to or used by anyone other than this addressee, nor may it be copied in
any way. If received in error, please contact Hackney Council,
www.hackney.gov.uk on 020 8356 3000 (out of hours - 020 8356 2300) quoting
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right under the Regulations, Hackney Council must have made all reasonable
efforts to inform every person who may use the system that interception
may take place and this notice to you should be regarded as such
notification..

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Dear Hackney Borough Council,

This is request is now overdue. Please provide a full response ASAP.

Yours faithfully,

Joel M Benjamin

Dear Hackney Borough Council,

Please pass this on to the person who conducts Freedom of Information reviews.

I am writing to request an internal review of Hackney Borough Council's handling of my FOI request 'Carbon Bubble Risk, Pension Fund Fiduciary Duty & Risks To Local Taxpayers Through LGPS Underfunding and Exposure to Investment Losses in Defined Benefit Schemes'.

This request is now in excess of 1 month overdue, and has not been answered despite prompts to do so.

Given the large volumes of members funds being managed by the pension fund committee, advisors and fund managers, and the extensive financial risk being carried by local taxpayers who effectively underwrite the defined benefit LGPS schemes and cover losses where the scheme is mis-managed, there is a substantial public interest case in favour of full disclosure.

A full history of my FOI request and all correspondence is available on the Internet at this address: https://www.whatdotheyknow.com/request/c...

Yours faithfully,

Joel M Benjamin

Dear Hackney Borough Council,

Giving this request a further reminder push as I have not yet received a confirmation email from Hackney that the Internal Review request has been received - and I have not received a response to calls to the Hackney FOI & Finance department in the past 24 hours?

Please respond ASAP - Hackney is the only London borough yet to do so.

Yours faithfully,

Joel M Benjamin

Joel M Benjamin left an annotation ()

Referred to ICO 26/2/17

Information Management, Hackney Borough Council

1 Attachment

Dear Joel  Benjamin

 

Please find attached the response to your FoI request.

 

Yours sincerely

 

Kim Starbuck

Information Management Officer – Governance

London Borough of Hackney

020 8356 4938

[1]www.hackney.gov.uk

 

The contents of this email are confidential to the intended recipient at
the email address to which it has been addressed. It may not be disclosed
to or used by anyone other than this addressee, nor may it be copied in
any way. If received in error, please contact Hackney Council,
www.hackney.gov.uk on 020 8356 3000 (out of hours - 020 8356 2300) quoting
the name of the sender and the addressee and then delete it from your
system. Please note that neither Hackney Council nor the sender accepts
any responsibility for viruses and it is your responsibility to scan the
email and attachments (if any). No contracts may be concluded on behalf of
Hackney Council by means of email communications.Please note that Hackney
Council reserves the right to monitor emails for the purpose of monitoring
or communications relevant to the Company’s business under the
Telecommunications (Lawful Business Practice) (Interception Of
Communications) Regulations 2000 (S.I. 2000/2699) ("the Regulations") for
the following reasons: to investigate or detect the unauthorised use of
the systems, e.g. that this policy is being observed, that no
discriminatory or offensive content appears in emails; to maintain an
adequate level of security for our computer systems; to detect any
computer viruses; to check mailboxes of absent employees. To exercise its
right under the Regulations, Hackney Council must have made all reasonable
efforts to inform every person who may use the system that interception
may take place and this notice to you should be regarded as such
notification..

References

Visible links
1. http://www.hackney.gov.uk/