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Four questions were received.

Greg Dropkin asked the following question. The arms industry is a major contributor to climate change, and the war on Gaza and ongoing siege is both an environmental and social disaster. How will the Responsible Investment Working Party of the Pensions Committee address these issues in relation to Merseyside Pension Fund investments in the arms industry in general, and in US and UK companies which supply components and weapons used on Gaza in particular?

Chair gave response. MPF takes its responsibilities as an asset owner seriously. Our policy of Responsible Investment (RI) arises from the belief that ESG factors can materially affect investment performance.

We place great importance on active ownership as our means of managing and shaping ESG matters and are mindful of the responsibility of investors to respect human rights as set out in the UN Guiding Principles on Business and Human Rights.

We seek to maximise our influence and finite resources through collaborative working; be that with other local government pension schemes through the Local Authority Pension Fund Forum (LAPFF), with our Northern LGPS partner funds (Greater Manchester & West Yorkshire) or wider investor groups such as the Institutional Investor Group on Climate Change (IIGCC). 

Subject to agenda item 8 being considered and approved by this Committee, as set out in the draft terms of reference, the Responsible Investment Working Party will support Pensions Committee in the consideration and development of its responsible investment policy, climate change and stewardship activities.  Under LGPS regulations and guidance, whilst the overriding duty of the Members of Pensions Committee is the pursuit of financial return within reasonable risk parameters in order to pay pensions, non-financial considerations may be taken into account provided that doing so would not involve significant risk of financial detriment to the scheme and where Members have good reason to think that scheme members would support their decision.  It is also worth noting that any pension shortfall arising from investment performance falls to Scheme employers to make up and not employees.

Any company with operations or interests in conflict-affected & high-risk area should undertake enhanced due diligence to assess the human rights risks and mitigation options. This approach is consistent with our developing stewardship policy, which considers human rights as a global systemic risk best managed collaboratively with other investors using an evidence-led outcomes-focused approach.MPF has endorsed the new Advance initiative from the UNPRI as part of this work, which brings together institutional investors to advance human rights and positive outcomes for people through investor stewardship. The Initiative will primarily seek change through investors’ use of influence with portfolio companies.

All right-minded individuals deplore the loss of life arising from conflict. 

There is a wide range of opinion on the merits of investment in defence companies for Committee to balance. Recent events such as the Russian invasion of Ukraine have thrown into relief the necessity of armaments in upholding sovereignty and maintaining social stability by deterring states from carrying out acts of aggression against others.  Peacekeeping forces also need to be suitably equipped. It is also the case that licences for the export of armaments are regulated and a matter of government policy.

It is intended that the Responsible Investment Working Party will allow Committee to develop further the framework within which ESG matters are considered and monitored. I do not have to hand information on whether the Pension Fund has investments in defence companies that sell arms to Israel or Saudi Arabia. It would depend upon how defence companies and their products were defined, and how one defined the buyers since supply chains can be complex.

I will ask the proposed Responsible Investment Working Party to look into the nature and extent of the Pension Fund’s investments in companies connected with the trade. As well as seeking to mitigate the environmental impact of its investments, MPF seeks investments that provide positive environmental and social benefits. Item 9 on today’s agenda gives a few examples of these types of investments and there are many other examples nationally and internationally.

I will ask the proposed Responsible Investment Working Party to look into the nature and extent of the Pension Fund’s investments in companies connected with the defence trade. Merseyside Pension Fund publishes on its website a full list of its shareholdings across all markets and this list is updated on a quarterly basis.

This response was also the appropriate answer to the three following questions.

Greg Dropkin asked a supplementary question, had the committee considered the additional evidence he submitted?

The chair responded that a more in-depth response would be provided in writing.

Prue Stothard asked a question. Is the Committee aware that MPF funds are being invested in companies whose products are used to kill men, women and children in Gaza, the West Bank and in Yemen, and how does this knowledge affect your decisions on Responsible Investments?

Prue Stothard asked a supplementary question; who has decided who will make up the group of the responsible investments working party?

The Chair informed the questioner that the group had yet to decide its membership but it will be decided by this committee and it will contain members of this committee.

Tony Norbury asked a question.As Merseyside pensioner in receipt of the Merseyside pension fund I do not want my pension to be funded or to fund the arms trade in any shape or form. I would like to ask the councillors on the pensions committee to start the process to divest any funds from our Merseyside pensions fund investments from being used to support the arms trade anywhere in the world. We have seen in our lifetimes and particularly in recent times what slaughter weapons of mass destruction fired into civilian areas against United nations humanitarian law can do to innocent families particularly children. I do not want any part in that cowardly act of murder, I do not want my hard-earned deferred wages (my pension) invested in destruction. The human race has reached a cross roads in our humanitarian evolution, we are losing our planet and our ecosystems are breaking down because of the greed of the few. I am one of the many pensioners that wants to see our Merseyside pension invested in humanitarian projects , projects that will protect our planet not destroy it, projects that will give our children and their grandchildren a better future not slaughter them I ask the councillors who sit on the pensions committee to take the right road and lead us to sustainability and humanitarian longevity, people living in peace and harmony with our planet and each other ,for that's where I believe we need to evolve to because the other road does not bare thinking about.

Tony Norbury asked a supplementary question about ethical investments and asked the committee to consider more sustainable investments.

Helen Dickson asked a question.Do the Pensions Committee know that MPF investments contribute to civilian deaths in Gaza and Yemen and nuclear weapons systems?

Helen Dickson asked a supplementary question. Would the Merseyside Pension Fund commit to assuring that Members are aware of the facts surrounding investments.

The Chair assured all questioners that an in-depth answer would be provided in writing in response to their supplementary questions.