Agenda and minutes

Apologies for absence were received from James de Sausmarez.

There were no declarations.

To receive the resolution of Investment Committee on 21 July 2020 appointing the Board and approving its terms of reference.

The Board received the resolution of the Investment Committee on 21 July 2020 appointing the Board and approving its terms of reference.

To agree the public minutes and non-public summary of the meeting held on 13 July 2020.

RESOLVED - That the public minutes and non-public summary of the meeting held on 13 July 2020 be agreed as a correct record.

Report of the Town Clerk

The Board received a list of outstanding actions. The Chamberlain advised that a section on Treasury Management for the Pension Fund had been incorporated into the Pension Fund’s Investment Strategy Statement, which was on the agenda for the Board’s consideration.

RESOLVED – That the report be noted.

Report of the Chamberlain

The Board received a report of the Chamberlain concerning the monthly investment analysis review for July 2020. The Board noted the current investment list, total investment values and average rate of return set out in the report. In response to a request by the Chairman, the Chamberlain clarified the reporting of the rate of return in respect of the Board’s investments in Short Dated Bond Funds, which included both income and capital gains.

RESOLVED – That the report be noted.

Report of the Chamberlain

The Board received a report of the Chamberlain, providing an end of year report reviewing Treasury Management in 2019/20. The Chamberlain introduced the report and drew Members’ attention to key points including cash balances and the impact of Covid-19 on monetary policy.

In response to a question from a Member on the increased cash balances, the Chamberlain advised that in addition to the receipt of borrowing proceeds from City’s Cash, the receipt of the April Business Rates Levy had taken place one day earlier than usual, causing a further temporary increase as at 31 March 2020. However, this was an operational matter and not considered to be a cause for concern.

A Member queried whether the prospect of negative interest rates being introduced in the near future was a cause for concern or would necessitate any changes. The Chamberlain responded that due to significant decreases the Board was already operating in a very low interest rate environment, but in the event of further decreases to zero or negative interest rates, there could be increased pressure on the revenue budget for the Funds going forward. Members suggested that this be revisited as the Board may need to develop a strategy to manage any further developments. The Chairman asked that this be added as an outstanding action with an update to be brought to the next meeting on the Board, adding that swifter action may be required if circumstances were to change earlier than expected.

A Member suggested that the Board maintain a number of bench managers for near-cash or short-date options to balance out any changes to the portfolio, and suggested that consideration of a longlist be undertaken for this purpose.

RESOLVED – That the report be noted.

Report of the Town Clerk & Chief Executive

The Board received a report of the Town Clerk and Chief Executive containing a scoped and costed Climate Action Strategy for the City of London Corporation, to be considered by the Policy & Resources Committee in September and the Court of Common Council in October 2020. The Chairman introduced the item and reminded Members of the wider context surrounding the report before handing over to the Director of Innovation and Growth to introduce the report.

The Director of Innovation and Growth then introduced the report and gave the Board an introduction to the Climate Action Strategy (the Strategy), before outlining the headline figures, and key points of the strategy, principally that the City of London Corporation will work towards 2027 as a date for net zero in its own operations or what is referred to as Scope 1 and 2, and to a net zero date of 2040 for our full value chain, or Scope 3 emissions. The City of London Corporation would also support net zero by 2040 in the Square Mile and build resilience to extreme weather in our infrastructure buildings and public realm.

The Board was then advised of the action points for the Financial Investment Board to undertake as part of implementing the strategy. This consisted of four high-level actions:

1.    Embed ESG Integration and Climate Related Financial Risk in Investment Mandates;

2.    Ensure climate criteria are embedded in Fund Manager selection criteria;

3.    Commit to having at least 60% of our portfolio Paris-aligned by 2040; and

4.    Join others in signalling ambition for 100% portfolio aligned by 2030 and become signatory to Task Force on Climate-Related Financial Disclosures

The Chairman then advised that Mercer had been consulted on the Strategy’s proposals and invited Mercer’s comments on the report. Mercer advised that it was felt the net-zero

Report of the Chamberlain

The Board considered a report of the Chamberlain presenting a revised Investment Strategy Statement for the Pension Fund for approval. The Chamberlain introduced the report and confirmed the Statement was a public document and subject to periodic review at least every three years. The Chamberlain drew Members’ attention to amendments made following review of the Statement by the Board, including a section on Treasury Management and added control ranges for each asset class within the strategic asset allocation.

RESOLVED – That the Financial Investment Board agree the revised Investment Strategy Statement as presented.

Report of the Chamberlain

The Board considered a report of the Chamberlain providing an annual summary of investment activity in relation to the Pension Fund for onward referral to the Local Government Pensions Board. The Chamberlain introduced the report and invited any additional comments from Members to be incorporated before the report was submitted to the Local Government Pensions Board. The Board then approved the report for onward referral to the Local Government Pensions Board.

RESOLVED – That the Financial Investment Board:

a)    Note the report; and

b)    Agree that the report be referred to the Local Government Pensions Board.

There were no questions.

There was no other business.

MOTION - That under Section 100(A) of the Local Government Act 1972, the public be excluded from the meeting for the following items on the grounds that they involve the likely disclosure of exempt information as defined in Part I of the Schedule 12A of the Local Government Act.

RESOLVED - That under Section 100(A) of the Local Government Act 1972, the public be excluded from the meeting for the following items on the grounds that they involve the likely disclosure of exempt information as defined in Part I of the Schedule 12A of the Local Government Act.

Item No.                                                          Paragraph(s) in Schedule 12A

14-19                                                                                       3

20-21                                                                                       -

To agree the non-public minutes of the meeting held on 13 July 2020.

RESOLVED - That the non-public minutes of the meeting held on 13 July 2020 be agreed as a correct record.

Report of the Town Clerk

The Board received a list of non-public outstanding actions.

Report of the Chamberlain

The Board received a report of the Chamberlain.

Report of the Chamberlain

The Board received a report of the Chamberlain.

Report of Mercer

The Board received a report of Mercer.

Report of the Chamberlain

The Board received a report of the Chamberlain.

Report of the Chamberlain

The Board received a report of the Chamberlain.

Report of the Chamberlain

The Board considered a report of the Chamberlain.

There were no non-public questions.

There was other business.