Agenda item

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 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 advanced corporate responsibility and responsible investment with collaboration having the potential to strengthening the voice of Pension Funds.

In noting the summary of key engagement work undertaken by the LAPFF during Q2 2024 (as detailed in Appendix 1 of the report) the following key areas of activity were highlighted:

·             Engagement, as part of the Forum’s ongoing work with banks on climate change with three of the largest banks in Canada (who were recognised to be increasing their lending to oil and gas companies) to outline LAPFF’s views to the companies in relation to net zero, understand their positions, and assess the prospect for further engagement.  This had resulted in a constructive dialogue being established as a means of develop investor expectations from the Forum’s perspective.

·             Ongoing engagement with water utility firms to address failures in supply infrastructure and concerns regarding pollution linked with the development of environmental objectives within each companies five-year business plan.

·             Engagement with the London Stock Exchange to highlight concerns about the weakening of standards relating to new entrants to the London listed companies market given the recent loss of value experienced by certain companies, which had been followed up with representations made to the Chair of the Financial Conduct Authority (FCA) as the UK Listing Authority.

Having reviewed 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, members were reminded that Brent’s continued membership of the LAPFF had been supported and approved at the previous meeting.

Having thanked George Patsalides for his presentation of the report, the Chair invited members to raise any questions or comments, with queries and responses summarised below:

·             In seeking further detail on the level of dialogue and co-ordination between other Local Authority Pension Funds regarding the type of engagement and collective lobbying being prioritised through the LAPFF, members were advised how this was structured and identified through the LAPFF governance and membership arrangements, which included opportunities for the necessary political as well as operational input.  In terms of outcomes being achieved as a result, members were referred to the Q2 engagement report which it was felt provided a good example of the LAPFF demonstrating the impact that could be achieved through collective engagement with market leaders with the main focus currently targeted on shared priorities in relation to tackling climate change. 

In terms of the ability to collaborate with partners across London on shared priorities outside of climate and environmental factors, officers advised that these were continually monitored and where opportunities identified these were, recognising the need to maintain focus given the complex nature of the process involved, taken forward with the example provided of the recent engagement with the London Stock Exchange.

With no further questions or comments, the Committee thanked officers for their work in delivering the update and RESOLVED to note the update report.