Issue - decisions

Matter for decision

The report summarised the issues around developing an ethical investment policy for inclusion in the Treasury Management Strategy and proposed wording for such a policy.

Decision of the Executive Councillor for Finance and Resources

i.                       Approved the insertion of the following in the Council’s 2015/16 Treasury Management Strategy

“Cambridge City Council notes the risks to both the planet and Cambridge from climate change and the need to show leadership in advocating a fossil-free future, including its investments. Where consistent with our fiduciary responsibilities the Council will avoid direct investment in institutions with material links to environmentally harmful activities including fossil fuels.

Cambridge city Council, in making investments through its treasury management function, full supports the ethos of socially responsible investments. We will actively seek to communicate this support to those institutions we invest in as well as those we are considering investing by:

·        Encouraging those institutions to adopt and publicise policies on socially responsible investments.

·        Requesting those institutions to apply those deposits in a socially responsible manner.

Counterparties will be advised of this statement”.

Reason for the Decision

As set out in the Officer’s report.

Any Alternative Options Considered and Rejected

Not applicable.

Scrutiny Considerations

The Committee received a report from the Head of Finance who made the following comments:

i.             The Council invested in building societies.

ii.            There was guidance that the Council had to comply with in relation to investments which included the security, liquidity and yield of the investment.

iii.           It would be difficult to measure ethical considerations.

The Committee discussed what a socially irresponsible investment might be and discussed, as an example, Shell in Nigeria.

In response to Members questions the Head of Finance confirmed the following:

i.             The Council did not invest in equity or corporate bonds.

ii.            Regarding the investments discussed by the Committee, for example Shell in Nigeria, there would be financial arguments for the Council not investing rather than ethical reasons.

The Committee unanimously resolved to endorse the recommendations.

The Executive Councillor for Finance and Resources approved the recommendations.

Conflicts of Interest Declared by the Executive Councillor for Finance and Resources (and any Dispensations Granted):

Not applicable.