Agenda item

This report updates the Committee on engagement activity undertaken by LAPFF (the Local Authority Pension Fund Forum) on behalf of the Fund.

Sawan Shah (Head of Pensions, Brent Council) presented a report that updated the Committee on engagement activity undertaken by the Local Authority Pension Fund Forum (LAPFF) on behalf of the Fund. It was explained that the partnership with LAPFF demonstrated the Fund’s commitment to Responsible Investment (RI) and utilising engagement as a way to achieve its objectives.

In summarising LAPFF’s engagement activity, the Committee noted the following:

•         LAPFF attended six AGMs and drafted over 50 climate related shareholders resolutions. LAPFF also issued 55 voting recommendations for environmental, social and governance (ESG) resolutions at mining companies and technology companies.

•         A voting alert was issued by LAPFF for Starbucks this year in support of a shareholder resolution calling for the company to uphold better practices on freedom of association and collective bargaining. This resolution was supported by 52 percent of the shareholder vote.

•         Oil and gas companies and banks were a further area of focus for LAPFF this AGM season. LAPFF supported the ‘Follow This’ resolutions at BP and Shell. The resolution received nearly 15 percent support and over 20 percent support respectively.

•         LAPFF raised concerns about HSBC’s approach to human rights and engaged extensively with Barclays.

•         LAPFF Vice Chair, Cllr Rob Chapman, attended the Drax AGM on the back of a LAPFF voting alert that raised significant concerns about the company’s climate practices and reporting in this area.

•         LAPFF had issued voting alerts largely supporting ESG shareholder resolutions filed at technology companies. In LAPFF’s experience, US companies did not have a culture of engaging with investors in the way that UK and Australian companies did. Therefore, while voting alerts were part of an engagement escalation strategy in most markets, LAPFF often issued voting alerts as an initial point of engagement. LAPFF continued to have concerns about corporate governance and social practices at large US technology companies.

•         This quarter LAPFF signed onto a letter to Toyota which called on the company to align its strategy and lobbying activity within 1.5 degrees of global warming scenario. LAPFF also met with the company as part of the collaborative engagement. The meeting covered proposed US regulations and the company’s likely position towards them.

•         LAPFF undertook engagement with National Grid to ensure that the company remained at the forefront of the energy transition. Detailed analysis revealed substantial issues – gaps in disclosure and transition plans, particularly on climate lobbying and a just transition. LAPFF’s leadership held meetings with the company, giving National Grid the chance to explain its concerns and suggest best practice. National Grid had acknowledged some of LAPFF’s comments and shortly before its AGM, the company announced that it would publish a comprehensive review of its climate lobbying activities, a key demand of LAPFF and other CA100+ members. National Grid had also publicised a policy proposal for addressing the delays in grid connection which was a welcomed development.

•         Overall, LAPFF engaged 84 companies during quarter 2.

With no further comments and in welcoming the update, the Committee RESOLVED to note the report.