Please confirm/ explain – for the 2023/24 and 2024/25 financial years only – providing copies of source/reference documents where available:
1. If/how you’ve 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?
Our Corporate Risk Register acknowledges that global emissions are on track to exceed 2 degrees, potentially reaching 3 degrees. The risk score is ‘very high’, which is the highest category.
With specific reference to the Pension Fund, climate change is included as a risk in the Fund’s risk register. 95% of our investments are managed by the Brunel Pension Partnership. As an organisation Brunel has always had Climate Change factors, and specifically physical climate risk and mitigation, in their risk register.
2. If/ how investment consultants you engage with have updated their models to include climate tipping points following expert and member criticisms since 2023?
We have not engaged with Investment Consultants on our Pension Fund investment strategy since 2022. We have just appointed consultants to undertake a review of our Investment Strategy and Strategic Asset Allocation in early 2025.
3. Have you updated Investment Strategy Statements & other related investment policy documents to reflect growing physical climate risks?
The last major review of Investment Strategy was undertaken in 2022, with a further review due in 2025. However, the section on Climate Change within the Investment Strategy Statements (ISS) was amended in June 2023 as per the report at the following link Investment Strategy Statement – Climate Change.
95% of our investments are managed by the Brunel Pension Partnership. Brunel’s Climate Change Policy has always reflected concerns about physical climate risk, and no reliance has been placed by Brunel on consultants or their models.
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?
There has been no specific discussion of climate risk modelling flaws/limitations, although the Committee regularly discuss issues associated with climate change.
5. Have you reviewed/ updated investment consultant procurement briefs/ mandates to include tipping points & reflect/ help manage mounting physical climate risks since July 2023?
We have just appointed Investment Consultants to undertake a review of our Investment Strategy and Strategic Asset Allocation. These issues will be discussed in relation to the work they will do for us.
6. Have you reviewed/ updated AM mandates to reflect/ help manage mounting physical climate risks since July 2023?
95% of our investments are managed by the Brunel Pension Partnership. Expectations on asset managers to consider physical climate risk was already a component of their mandates, as it requires them to have regard to Brunel’s Climate Change Policy, which is consistent with the Devon Pension Fund’s policy. That policy sets out that we will incrementally enhance our expectations on all aspects of climate risk overtime, including but not limited to physical climate risk.
In the Autumn of 2023, the Devon Fund’s passive equity allocation was consolidated into a Global Developed Paris Aligned Benchmark Passive Fund as part of our approach to achieving a net zero investment portfolio by 2050.
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.
Devon County Council does not hold this information as Asset Managers are appointed and monitored by the Brunel Pension Partnership on our behalf. Please contact them using information at the following link Contact us – Brunel Pension Partnership.