Issue - meetings

To present members with an update on engagement activity undertaken by the Local Authority Pension Fund Forum (LAPFF) on behalf of the Fund.

The Board received a report providing an update on the engagement activity undertaken by the Local Authority Pension Fund Forum (LAPFF) on behalf of the Fund, as detailed with the Q3 LAPFF Engagement Report included as Appendix 1 to the cover report.

In noting that the report had been subject to detailed review at the Brent Pension Fund Sub Committee on 19 February 2025 the Board RESOLVED to note the report and update on LAPFF engagement activity.

To present members with an update on engagement activity undertaken by the Local Authority Pension Fund Forum (LAPFF) on behalf of the Fund.

George Patsalides (Finance Analyst, Brent Council) introduced a report from the Corporate Director Finance & Resources which detailed the Local Authority Pension Fund Forum (LAPFF) Engagement Update.

In presenting the update, members were advised that the LAPFF had been established to promote the highest standards of corporate governance in order to protect the long-term value of local authority pension funds and engage directly with companies in which investments were held in order to affect change, understand views on company behaviour and risks with engagement being member led and designed to advance corporate responsibility and responsible investment on the basis of collaboration strengthening the voice of Pension Funds.

In noting the summary of key engagement work undertaken by the LAPFF during Q3 2024 (as detailed in Appendix 1 of the report) the following key areas of activity were highlighted:

• Continued engagement with Shell and BP, to push oil and gas companies beyond their current decarbonisation efforts based on existing business models attempting to challenge the viability of current business practices. The expectation, based on LAPFF policy, was that the demand for hydrocarbons would reduce in aggregate terms and that demand would be met by lowest cost producers.  Whilst BP was regarded as being located at the better end of the sector in recognising climate change as an issue, it was also facing competitive and structural pressures from what was regarded as a disruptive transition due to alternative technologies with some push back on carbon reduction targets since 2023 and substantial threats identified to its business model regarding the scope of no-carbon products that would fully replace the scale of the fossil fuel business.  Members were advised that a meeting with the Chair of Shell was also pending confirmation, with LAPFF continuing to challenge whether Carbon Capture and Storage could be made to work as a line of business given the costs involved if no cheaper substitute energy sources were available.

• The engagement which had been focussed on the use and potential elimination of zero-hours contracts in the UK with companies using them as part of their core operation and LAPFF continuing to monitor developments relating to the Employment Rights Bill and engage with investee companies regarding their exposure to the practice.

• Ongoing engagement with water utility firms to address failures in supply infrastructure and concerns regarding pollution, with LAPFF working to ensure that water utilities companies were making progress in reducing overflow incidents while ensuring that upcoming business plans were cost efficient and included both environmental and social commitments aligned with any final determinations by the regulator.

• The efforts being made to ensure energy companies and airlines were making tangible efforts in seeking to decarbonise their industries in the transition to net zero including the use of fuel supplies and emissions.

Having noted the viability and advantages available through the sustained collective effort and pressure that could be applied through the LAPFF, rather than by single Pension Funds acting individually, the Chair thanked George Patsalides for presentation of the report, and then  ...  view the full minutes text for item 8