The Company AGM of the future: 5 ways to change the AGM for the better

 

Hat tip to ShareAction on how to improve the Annual General Meetings of public companies. I have been to a number of dreadful AGMs in the past (a very few good ones) and fully support all their recommendations, especially inviting the workers of a company to participate.  

By Michael Kind, Campaign Manager – Saver Networks

Every year – with your support – we attend the AGMs of the biggest companies. It’s a brilliant direct line to decision-makers that has helped our campaigns go from strength to strength.

But last year, things were different.

Covid-19 saw a change to the rules which, due to social distancing measures, allowed companies to hold their UK AGMs virtually or behind closed doors with a minimum number of people present.

Disappointingly, two out of three FTSE100 companies choose the latter.

That prompted much debate.

But long before 2020, AGMs were too often poorly attended, inaccessible and at times unproductive.

We agree that it’s time to think critically about these vital meetings. And we’ve developed a bold new vision for the AGM. One that supports investors and companies to act responsibly.

Here are five things to know about our vision for the future of the AGM:

#1 – Stakeholders – not just shareholders – should be given access to AGMs

There is immense value in inviting a range of stakeholder groups to AGMs.

Stakeholder groups can currently only attend if they buy shares, or are lent them.

But for companies to truly understand their impact, and for investors to hold them accountable, they need to hear from a wide range of people.

It is the workers of a company, their suppliers or those impacted by a company’s activities who tell the real story of a its impact beyond the bottom line.

No other forum exists for companies, stakeholders and investors to come together and engage in a dialogue.

We want the AGM of the Future to be the place for this.

#2 – More investors should attend

We’ve noticed over the years that many of the AGMs we attend are far too quiet.

Where are our pension providers and the asset managers who own most of these companies?

Because they own so many shares, the AGM isn’t their only opportunity to engage with the board. They usually meet with them throughout the year.

But the AGM of the Future won’t just be an opportunity to speak to boards. It will be an opportunity to engage with company stakeholders, and observe how a company responds. We want to see investors make the most of this opportunity – hearing directly from these stakeholders and learning first-hand about a company’s impact.

The AGM is also one of the best opportunities for investors to challenge and question companies in a public way. By doing so they send a signal that a company needs to up its game. The more investors do this, the more pressure there is on companies to act.

#3 – Resolution voting should be split from the AGM event

Shareholders vote on a number of things at AGMs. And their votes are so important. It’s one of the best ways for them to hold companies to account and to act responsibly.

If a company is performing poorly on environmental or social issues, then investors can send them a signal by voting against directors, or for special resolutions. Like our one at HSBC.

But there’s a problem. At the moment investors can vote before the AGM itself – and most do. This means that any discussion or questions at the AGM don’t have a material impact on the votes.

How is the AGM supposed to help investors hold companies to account if they vote beforehand? It reduces the value of the discussion and the questions asked. They’re less powerful if investors don’t use them to inform their vote.

Therefore, we’re calling for the vote to take place after the AGM. This will make the AGM more meaningful, and support investors to better hold companies accountable.

#4 – Participants should be able to engage with a company in greater depth

At the moment you can only ask one question at an AGM. And sometimes, the company response can leave you with more questions than answers. It can all feel superficial.

We think there is a lot to be gained from supporting an ongoing and nuanced conversation between participants and boards. This will better support companies to meet the challenges they face, and give investors and other participants the confidence that they are on the same page.

We’re suggesting that a company should engage in a dialogue with its stakeholder groups throughout the year.  And that you should be able to submit and receive an answer to a question before the AGM, that you can then build on at the event.

This should see the AGM being the culmination of an ongoing conversation, rather than being one of the few opportunities to speak to a company.

#5 – You should be able to attend from your home

Most UK AGMs are held in London. Attending an AGM is not all that accessible for the majority of people.

We’ve all had to adapt to communicating online over this past year. Companies too.

So, there shouldn’t be a repeat of last year, where only a minority of companies allowed shareholders to attend their AGM virtually. Companies should allow virtual access to AGMs during the pandemic.

And once things are more back to normal, we’re calling for what’s known as a hybrid AGM. This would allow you to attend physically or online. It would increase access – by enabling any stakeholder to attend from any part of the world. But it also supports that vital part of AGM experience: meeting company boards in person, and being able to follow-up on your question.

Read our report “Fit-for-Purpose? – The Future of the AGM” here >>

May Day Workplace Disclosure Initiative - "Improving the quality of jobs".

I went to fascinating (and packed)"May Day" meeting today as a Pension trustee asset owner on the launch of a new report by the "Workplace Disclosure Initiative" on "Improving the quality of jobs". 

One of its recommendations was that there should be as much reporting by companies on how they treat their workforce (including their supply chain) as on climate change. 

I will blog further once the local elections madness are over but I was impressed with the story told by its Executive Chair, Richard Dickinson in his opening remarks.

“A Ford boss shows a union leader around a new car assembly line made up of robots. 
Boss says he would be interested to know how union will get union dues from robots. 
Union leader relies by saying he would be interested to know how robots will buy cars"

My question to a panel debate was this:-

"As a trade union activist I had the choice today of going to this event or the traditional May Day march & rally in Trafalgar Square. Despite the beautiful weather, I am pleased with what I am hearing here. However, while the UK is clearly not as bad as many developing countries in the way they treat workers, we must get our own house in order as well. I represent workers in the UK who live in poverty, have insecure employment, awful housing and feel hopeless and betrayed. Unless we clean our own house, concern for those overseas may be seen as crocodile tears. 

My question is does the panel agree that in the long term, companies who treat all their workers well will tend to produce superior investment returns?

I was pleased that the panel was broadly supportive. Janet Williamson from the TUC said there is a  high road to profitability and a low road. In the short term you can make profits from treating your workers badly  The "high road" is better. You do need "vision". Sustainable profitability is via the high road. Decent work should be "business as usual". 

Join the Shareaction Activism team

If you have a pension or insurance policy you may in law have duties and responsibilities for the companies your scheme owns and invests in. If you own it then you can't just moan about it without doing something about it...

"This is Michael writing from ShareAction. I’m our new Shareholder Activism Coordinator and am moving full steam ahead in organising our AGM activism over the coming months.

This is beginning with training sessions for new and existing AGM activists – can you help us promote these? They are as follows:

Climate-themed: 04 April, 6-8.30pm, Waterloo

Living Wage-themed: 18 April, 12.30-2.30pm, Holborn

General Theme: 26 April, 10am-midday, King’s Cross

AGM activism is a winning tactic, and any individual can participate in it. Tesco recently committed to using 100% renewable energy and one third of the UK’s top 100 companies have become living wage employers. AGM activism played a major role in making this happen.

If you have any means through which you’d be to promote these trainings that would be brilliant. The more skilled-up AGM activists we have, the more effective responsible investment becomes, and our movement expands.

To make things easier for you, here’s some template tweets you can use:

.@ShareActionUK is holding CEOs to account through #AGMActivism on #LivingWage, #Climate & more, get involved!>> http://bit.ly/2IFEj3F

Want to ask the CEOs of top companies to pay the #Living Wage? Join @ShareActionUK's #AGMActivism >> http://bit.ly/2IFEj3F

Want to challenge the CEO of Shell in person? Come along to @ShareActionUK's #Climate themed #AGMActivism session >> http://bit.ly/2FYeURd

It would be great if you could help spread the word!

Michael Kind

Shareholder Activism Coordinator

ShareAction

(Fairshare Educational Foundation)
16 Crucifix Lane, London UK, SE1 3JW

T: 020 3475 7874

W: shareaction.org

ShareAction Summer thank you 2017

Picture collage from Thursday evening "thank you event" in Brick Lane, East London for supporters of ShareAction - a campaigning body "to make investment a force for the good". 

It was great to meet so many people concerned about the power and impact of our collective investments. I met for the first time their CEO Catherine Howarth's children and her wonderful Mum!

I also had a chat with the Red City of London, Peter Kenyon; was lectured at by a pompous Green, entertained by Henry Tapper; spoke to two authors on Pension Governance and was really pleased to see that "Professional Pensions" won the "award" for "Strongest Coverage" of Responsible Investment. Well done to Stephanie and Jonathan.

As was mentioned at the event, the really exciting thing is that ShareAction are winning the argument...

Workers' Capital in the 21st Century: ShareAction Annual Lecture with Sharan Burrow

The keynote speaker at this years ShareAction annual lecture in the historic Conway Hall, Red Lion Square, London was the General Secretary of the International Trade Union Confederation, Sharan Burrow.  The ITUC is the global version of the British TUC.

Sharan give a well argued and passionate speech on "Workers Capital" (the pension investments and other savings of workers) and in favour of using it to support climate transition while respecting fossil fuel workers and their contribution to our prosperity.

She repeated her mantra that I first heard her say at the recent CWC meeting last month "there are no jobs in a dead planet".  While she welcomed the green "disinvestment warriors" present who would want pension funds to immediately pull out of investing in Carbon industries such as Coal and Oil, she did favour engagement with firms if they are willing to take part in transition. Some will earn our trust.

              

If companies refuse to change then we do have the powerful leverage of disinvestment by our pension funds. We are close to losing the Climate Change War and must act if our politicians fail to regulate.

Sharan praised the TUC for setting up "Trade Union Share Owners" where trade union staff pension funds collectively vote their share holding and she hoped other national unions would do the same. Also ShareAction for its success in furthering the Living Wage.  She thought that the election of Jeremy Corbyn as Labour Party leader was a great symbol of the possible. 

                         

Her closing remarks was the battle cry "Zero Carbon, Zero Poverty".

Next Speaker was Gail Cartmail from Unite, who spoke about role that unions can play by representing the interests of their members investments, Colin Meech from UNISON who talked about the need to control costs of our pension funds like they do in Holland, while Jeannie Drake reflected that many workers do not have unions in their workplace and have contract not trust based pensions, so how do we leverage their capital?

There was then a Q&A during which Green Party leader, Natalie Bennett, asks whether there are civil Liberty groups present today and can we work together? I tried to ask a question but wasn't called on how trades unions generally will have to raise their game and give practical support and guidance to pension trustees if we want them to pursue a progressive agenda on climate change.                             

Catherine Howarth from ShareAction closed this successful event with a call for a legally binding "Charter of Rights" for investors and owners. 

Workers’ Capital in the Twenty-First Century

Please find attached an invitation to ShareAction’s 2015 Guest Lecture.

Workers’ Capital in the Twenty-First Century  will be delivered by Sharan Burrow, General Secretary, International Trade Union Confederation

Date and time: Tuesday 22nd September, 6.15 - 7.30pm 

Location: Conway Hall Red Lion Square London WC1R 4RL

RSVP: lecture@shareaction.org

With thanks to: UNISON and Unite the Union who are supporting the lecture

The lecture is free of charge & will be followed by a drinks reception

Please feel free to circulate through your networks

Stop a £43m fat cat pay deal - Tell your pension fund to say NO to Martin Sorrell rip off at WPP

"Dear John, the FTSE fat cats are at it again. Advertising and marketing company WPP wants to pay its boss, Sir Martin Sorrell, £43m this year. That’s 2378 times what you'd earn on the London Living Wage.

Last November, you emailed your pension fund about a high pay deal at BG Group - and it worked. [2] The company received a barrage of opposition from shareholders, including pension funds, and the pay deal was cut. Your voice had a real impact. It's time to do it again.

Take two minutes to make sure your pension fund votes NO to £43m a year at WPP on Tuesday.

At WPP's annual general meeting on Tuesday, shareholders including our pension funds will be asked to vote to approve the pay deal. As savers, we have an opportunity to make sure shareholders vote no to this excessive pay package.

This deal is seen as very high even within the industry. One group, Glass Lewis, has recommended that shareholders vote against the "wholly excessive" pay deal. However another group, ISS, has said shareholders should vote in favour despite labelling the pay deal "exceptionally high." [1]

Tell your pension fund to vote NO using this quick and easy tool.

With the industry divided, it's more important than ever that pension funds hear from their customers on this issue. Let's make sure WPP knows that it can't get away with spending shareholders' money on such excessive high pay.

Thank you,

Colette, Matt, Grace and the rest of the team at ShareAction.

[1] The Guardian: Sir Martin Sorrell's pay package labelled 'excessive' by investor advisory group
[2]: The Guardian: BG Group cuts Helge Lund's 'golden hello' after shareholder pressure"

Join the Pension Scheme Revolt against Executive Greed at BG Group

I have just contacted my own pension schemes and asked them to ensure that our fund managers
are instructed to vote against BG Group paying its CEO up to £25 million.

If you agree then Click on the ShareAction links below to contact your own funds. It takes two minutes and all you need is the name of the scheme and not policy numbers.

"Dear John,

Another incoming CEO, another unreasonable pay packet. This week there’s a revolt brewing over oil and gas giant BG Group, who are looking to pay incoming CEO Helge Lund up to £25 million.

Not only is this seen as high in the industry, it is in violation of the pay policy approved by BG shareholders only six months ago at their AGM. Shareholders are being asked to approve Lund's pay packet at an extraordinary meeting next week.

Our savings give us a say at that meeting: our pension funds are BG Group shareholders, and they can vote no to this excessive pay deal.
Will you tell your pension fund to vote against Lund's pay packet? Click here to email your fund.

Investment managers and Business Secretary Vince Cable have already come out and criticised this pay packet, while industry experts have labelled it "excessive and inflammatory." [1] Over the past few years, more and more shareholders have been taking a stand against high pay – and supporting calls for companies to pay fair wages instead.

At a time of austerity, when millions are struggling financially, greed at the top through high pay destroys trust and contributes to growing levels of inequality. We have the opportunity, as pension savers, to counterbalance this and use our savings as a force for good in the investment system. So let’s group together and put that to the test.

Our pension funds are big shareholders in BG Group – if enough of them vote no, then it would be enough to reject the pay packet at BG’s meeting next week. 
Can you send your pension fund a quick email to make sure they vote no? We’ve got a template email you can get started with.

Let’s make sure that BG, one of the largest oil and gas companies in the world, know that excessive high pay won’t fly with us or its shareholders.

Thanks for taking action,
Bex, Colette, Juliet and the rest of the team at ShareAction

[1] Jill Treanor, "BG pay deal 'excessive and inflammatory', says Institute of Directors," Guardian (25 November 2014);
Christopher Adams, David Oakley and Michael Kavanagh,"Top investors warn of revolt over new BG Group chief's pay deal," Financial Times (26 November 2014);
Joe Murphy, "Vince Cable urges shareholders to reject £12m bonus deal for energy chief," Evening Standard (26 November 2014).


UPDATE:  Great news from ShareAction - BG have withdrawn proposal

The Case for the Living Wage - Why a Living Wage Pays Dividends

Thursday evening I went to a well attended ShareAction event to mark "Living Wage" week and the launch of their latest "Investor Briefing" on the business case for a Living Wage.

Rhys Moore, the director of the Living Wage Foundation, spoke first about the doubling of employers who now pay a living wage in the last 12 months. It is now £9.15 per hour in London and £7.85 in the rest of the country. The national minimum wage is only £6.50 per hour. The Living Wage is about 70% of the medium national income while the international definition for poverty is 60%. Last year there was only 5 FT100 companies who paid a living wage, now there is 19.

Rhys thinks that a living wage is becoming a norm for responsible employers. Research shows that 25% of workers who earn less than a living wage, do not work in a "low pay" sector. The foundation are about to launch a living wage "consumer movement" to encourage people to "buy" only at living wage employers.

Next speaker was Phillipa Birtwell from Barclays Bank, who is its "Head of Reputational Risk" and told us about their ground breaking agreement in 2004 with the community group TELCO, over cleaners being paid a living wage at their Canary Wharf offices. Even though only 200 workers were involved, the story went  "viral". The benefits of applying a living wage is a fantastic human interest story.

Lisa Nathan from ShareAction spoke about the investor benefits from a living wage such as staff retention and reduction in turnover, reduced absenteeism and improved morale leading to increased productivity.

As well as being a corporate citizenship issue there is also a macro economic growth argument since if those who are paid the least, get a pay rise, they will spend it locally and boost demand.

Finally, there was a panel (see my pretty rubbish photograph above) with Cllr Richard Greening, Chair of Islington Council Pension Fund; Janice Turner, Vice Chair of the Association of Member Nominated Trustees (AMNT); Sarah Smart, Chair of the Pension Trust, James Corah from CCLA and chair Catherine Howarth.

Richard explained how 98% of all its employees are on a living wage, the only major area that they are not is a Private Finance Initiative (PFI) providing residential care. As a member of LAPFF they are also trying to control executive pay. He believes that the living wage campaign is now at a tipping point and becoming main stream.

Janice from the AMNT talked about an exciting new initiative which could have an significant impact on the living wage. At the moment the vast majority of votes at company annual general meetings are automatically voted in favour of management. Fund managers who do this are not held to account. The AMNT in partnership with others, is trying to draw up "Red Lines" voting guidelines. Pension funds of all sizes could agree to adopt a common set of voting instructions on Governance issues. So it could (this is early days) mean that fund managers are instructed to vote against any company that does not have all its staff on a living wage and and no future plans to do so.

Sarah explained that the Pension Trust was a £6 billion pension fund that caters for the "not for profit" sector. While its primary purpose is of course to meet its pension obligations, she doesn't think that companies paying a living wage is a huge investment problem. Pension funds are for the long term and believe in responsible investment. The Pension Trust recently became a Living Wage employer. The contract cleaners in their head office in Leeds had a pay rise of £1 per hour which has made a big difference to their lives.

Last speaker was James from ethical fund managers CCLA who were hosting this event. He quoted sections from the famous classical economic textbook "The Wealth of Nations" which appear to support the arguments for a living wage. He pointed out therefore that both the author Adam Smith and the Bank of England argue for a living wage.

In the Q&A I made a comment that as a pension trustee we believe that we will get better returns in the long run if we invest in well governed and responsible companies.  For example, those who treat their staff well, who do not destroy the environment, bribe public officials etc.  As investors we must be concerned with the substainablity of companies whose entire business model is dependent on paying its staff poverty wages and being reliant on state benefits to exist. 

Campaign to Save Member Nominated Trustees: Trying to keep the City honest!

I was recently interviewed on the telephone by a researcher for the campaign group for responsible investment ShareAction.

They are rightly concerned that there is a move towards getting rid of independent member nominated trustees of pension funds and replacing them with "professional advisers". This is my edited record of the interview.

Q. We’ve been asked by civil servants to provide any instances of proof where having a member nominated trustee on a board actually resulted in different outcomes, compared with not including MNTs.  What would you say to this?

MNTs are often the only people from outside the often ‘cosy club’ of providers, advisers and consultants who are actually independent. They can be the only people prepared to ask difficult questions and challenge things like fees and charges, whereas an adviser who is themselves on £100k plus a year would not.  And they are far most sensitive about fees and charges because - it’s their own money!

MNTs are also often the only ones to really bring up Environment, Social and Governance (ESG) issues.  Many employers and providers pay lip service to this and claim they think it’s important but ESG is never actually an agenda item and often is not brought up at meetings unless the MNT brings it up.

MNTs are very dependent on their advisers, they don’t actually run the schemes themselves after all.  But advisers don’t have a fiduciary duty, their duty is to their employer or their firm’s partners.  MNTs have a unique fiduciary duty to members and this is absolutely crucial.

Q. We’ve often heard the criticism that pensions are very complex and MNTs just don’t have the expertise to do the job properly.  What would you say to this?

‘Rubbish’. It’s not true at all.  The Pension’s Regulator actually over-complicates the system in some ways.  There are many actors in the system who benefit from this complexity, the more complicated it is the more there is a need for experts to advise.  The recent research into local government pension schemes which showed active management to be a waste of money is evidence of this.  When I was first involved in governing a pension scheme, in the early 90’s, we  had 2 or 3 investment funds – who did fixed income, equities and property for example.  Now schemes have 10-11 funds.  Its all got far too complicated and far too expensive.

If people can make money from complexity and being experts than they will, it’s just the way of capitalism and a reasonable response to systemic incentives.

Saying that, we do have to be honest that not all trustees are up to speed, we are carrying some deadwood in the system.  This is sometimes because they don't have the support or haven’t been given the training, or they haven’t been shown why the training is really important.

Some MNTs are selected for the role, rather than being elected, and I do worry that in some cases individuals are deliberately selected because they won’t really challenge the employer or provider.  Its human nature, if the people responsible for administering the pension scheme choose who sits on the trust board, why would they want to choose individuals who are going to give them a hard time?

I knew a really capable MNT, one of the best I have ever known, who who was kicked off the board because she challenged the scheme too much in one respect.  She refused to ever vote on a matter if she hadn’t been sent the papers at least 24 hours in advance, she was very diligent and capable but she was managed out of the role.

Churchill said "Democracy is the worse form of government - apart from all the rest". MNT's should always be directly elected by beneficiaries in my view.

Q. What is the biggest challenge that you face in carrying out your roles as an MNT?

Getting sufficient time off work, to stay on top of all the developments in the pension world and go on training courses, to do necessary reading as well as attending the actual trustee board meetings. Some employers are very good at giving reps enough time off to do these roles but others aren’t.

Q. Is there anything that we should be calling for the regulator to do to improve this situation?

There is already guidance that says that time off should be given to trustees but this guidance needs to be clearer – for example it could specify that time off is needed for reading and training as well as attending the meetings.  There is about a day’s worth of reading to do for each meeting.

I don't think as a rule that MNTs should be paid for their roles, as they are managing their own money, but the employer could be reimbursed by the scheme for giving them the time off and if a MNT is out pocket, they should be fully reimbursed.

Q. Apart from providing a fresh, non-industry perspective and asking challenging questions, what are the other benefits of having MNTs on the board?

It gives the members confidence in the system when they can see that they have their own representatives involved in governing the scheme.  This is essential because many members have a real distrust of the scheme or the employer and this is preventing them from saving enough.

In some good schemes they have an AGM once a year where trustees can talk to ordinary members and often encourage them to join the scheme. Senior management or PR type people just can’t talk to members in their own language in the same way.

Member reps are essential for building trust in the system and proper accountability. I have lived through so many scandals in the Financial services industry, like Maxwell, Equitable Life, 2008 etc, and it should be obvious to everyone that people from outside the industry need to be involved in governance to stop foul play.

Q. We have been calling for more schemes to hold AGMs, but hear the criticisms that they won’t work, no one will come, it’s a waste of money.  What is your experience?  Do AGMs work?

Yes they do.  Many schemes typically get very good turnouts.  I have been to AGMS of FTSE 100 companies where the turnout was much worse than at a pension scheme AGMs – and the quality of questions was poorer too.

Q. What kind of things do people ask questions about mainly at pension scheme AGMs?

Benefits.  And after that ESG is the next biggest topic. Employers and providers are very nervous about ESG issues but they aren’t actually doing anything about it.

Q. You’ve said that ESG is on the radar of trustee boards and pension schemes, but what can be done to move things to the next stage of getting them to act?

We need to get the message across that it makes good business sense to incorporate ESG.  This approach is better for getting your money to grow in the long-term than chasing short-term, speculative returns.  The funds I am involved in are not ethical funds, but they still care about investing ethically because it’s best for the fund.  There are still, unfortunately, a lot of people out there who thing that ESG is just for tree-huggers

Q. What kinds of mechanisms should schemes (trust-based and IGCs) put in place to open channels of communication with members, apart from AGMs?

Schemes should have good websites and newsletters, where they profile trustees.  I have seen organisations who do a ‘trustee of the month’ feature, for example, which works well.  Large organisations can also post things on notice boards in communal areas.

Q. What have been your proudest achievements during your time doing these roles in pension governance?

My proudest achievement is getting a proper reaction from the fund management industry to the Rana Plaza disaster and other factory fires in Bangladesh. A lot of fund managers initially didn’t get why this was important and we had some very "difficult" meetings.  We did succeed in convincing fund managers to take appropriate action to try and ensure that this type of thing does not happen again.  This was particularly important in my pension fund as a lot of scheme members are of Bangladeshi origin.

The TUC, AMNT and UNISON stewardship networks have been very useful for achieving these sorts of aims and I  has seen how actions these schemes have taken have filtered through to the wider industry.

Q. Any final comments?

Schemes need to recognise that it’s just not good for them to shut out the members.  They should welcome MNTs as these people help schemes to realise their own weaknesses.  The industry should know this.  There is no ‘invisible hand’ regulating the market. We try and keep schemes honest and successful. Nothing more and nothing less.

(I suspect that many will not know who is the person in the picture - it is mega pension thief Robert Maxwell)

Who do you want to look after your future? Tell the FCA to give you a say!

This is another great campaign by ShareAction to encourage all of us with pensions to hold the financial services industry to account for what they do with our money.

It is clear that we are being ripped off and we often have little or no control over the means of our future. To me both these points are related.

The new regulator, the Financial Conduct Authority (FCA) is holding a "consultation" on governance but ShareAction believes that the Government clearly thinks that we don't have any rights to what happens to our money or how it is invested.

If you think it is important that you have transparency and a voice - then click here and let the FCA know.

Implications of Climate Change for Investment Returns and for Beneficiaries: AMNT Open Day

This is the first in series of posts on last weeks AMNT open meeting and AGM.

I was really pleased to see that there was a quite a few UNISON LGPS member nominated reps present.

The morning was a training session on the implications of Climate Change on Investment returns and for our Beneficiaries. Bearing in mind the very unusal weather we have been having this winter, this is a very topical subject.

Our meeting was opened by our Joint Chair Barry Parr who introduced Catherine Howarth. (see picture) who is a former pension trustee and the CEO of ShareAction (use to be called "Fair Pensions").

Catherine believes that Trust schemes have clear duties to take Climate Change seriously but with Contract schemes it is less clear legally but still a compelling reason to act.

She spoke about the Greenlight report launched recently with Pension Minister Steve Webb MP. There is a need to "nudge" pension schemes into managing the growing risk of climate change. There are a number of good schemes that are addressing this but many others who clearly "don't get it".

One sign of a good scheme is how well it communicates with its members.  Schemes needs to organise relevant training, look at governance policy development and carry out risk assessments. Need to look at low carbon investment opportunities and take into account that Auto-enrolment will bring in many young people into pension schemes, who will bear all the investment risk  of climate change in the coming decades.

Next was a speaker from PRI then climate change expert Meg Brown.