Local Authority Pension Fund Forum - annual report to LGA Board 2023

Lead Member: LAPFF Executive Committee

Lead Officer: Cllr Doug McMurdo, LAPFF Chair

Email: [email protected]

Address: C/O PIRC Ltd, Exchange Tower, 8th Floor, Suite 8.02, 2 Harbour Exchange Square, London E14 9GE

Website: Local Authority Pension Fund Forum

(Funds)

• Avon Pension Fund
• Barking and Dagenham (London Borough of)
• Barnet LB
• Bedfordshire Pension Fund
• Bexley (London Borough of)
• Berkshire Pension Fund
• Brent (London Borough of)
• Camden (London Borough of)
• Cardiff and Vale of Glamorgan Pension Fund
• Cambridgeshire Pension Fund
• Cheshire Pension Fund
• City and County of Swansea Pension Fund
• City of London Corporation
• Clwyd Pension Fund
• Cornwall Pension Fund
• Croydon LB
• Cumbria Pension Scheme
• Derbyshire County Council
• Devon County Council
• Dorset County Pension Fund
• Durham Pension Fund
• Dyfed Pension Fund
• Ealing (London Borough of)
• East Riding of Yorkshire Council
• East Sussex Pension Fund
• Enfield (London Borough of)
• Environment Agency Pension Fund
• Essex Pension Fund
• Falkirk Council
• Gloucestershire Pension Fund
• Greater Gwent Fund
• Greater Manchester Pension Fund
• Greenwich Pension Fund
• Gwynedd Pension Fund
• Hackney (London Borough of)
• Hammersmith and Fulham (London Borough of)
• Haringey (London Borough of)
• Harrow (London Borough of)
• Havering LB
• Hertfordshire
• Hillingdon (London Borough of)
• Hounslow (London Borough of)
• Isle of Wight Pension Fund
• Islington (London Borough of)
• Kensington and Chelsea (Royal Borough of)
• Kent Pension Fund
• Kingston upon Thames Pension Fund
• Lambeth (London Borough of)
• Lancashire County Pension Fund
• Leicestershire
• Lewisham (London Borough of)
• Lincolnshire County Council
• London Pension Fund Authority
• Lothian Pension Fund
• Merseyside Pension Fund
• Merton (London Borough of)
• Newham (London Borough of)
• Norfolk Pension Fund
• North East Scotland Pension Fund
• North Yorkshire County Council Pension Fund
• Northamptonshire Pension Fund
• Nottinghamshire County Council
• Oxfordshire Pension Fund
• Powys County Council Pension Fund
• Redbridge (London Borough of)
• Rhondda Cynon Taf
• Scottish Borders Council Pension Fund
• Shropshire Council
• Somerset County Council
• South Yorkshire Pensions Authority
• Southwark (London Borough of)
• Staffordshire Pension Fund
• Strathclyde Pension Fund
• Suffolk County Council Pension Fund
• Surrey County Council
• Sutton (London Borough of)
• Teesside Pension Fund
• Tower Hamlets (London Borough of)
• Tyne and Wear Pension Fund
• Waltham Forest (London Borough of)
• Wandsworth (London Borough of)
• Warwickshire Pension Fund
• West Midlands Pension Fund
• West Yorkshire Pension Fund

The Local Authority Pension Fund Forum (LAPFF) is the UK’s leading collaborative shareholder engagement group. Formed in 1990, LAPFF brings together 87 public sector pension funds and six pools from across the UK with combined assets under management of over £350 billion, representing a majority of funds under management by local authorities.

LAPFF exists to promote the investment interests of local authority pension funds in the UK, and to maximise their influence as shareholders to promote corporate responsibility and high standards of corporate governance amongst the companies in which they invest.

LAPFF members meet quarterly to discuss and debate a broad range of investment issues concerned with shareholder responsibilities and engagement activities. During the year, members discuss reports on a wide range of topics, with meetings being serviced by PIRC Limited, as the appointed research and engagement partner to the Forum. Keith Bray, formerly County Treasurer at South Glamorgan County Council and Director of Finance at the City of Cardiff Council, is the LAPFF officer with the role of promoting the work of LAPFF generally and amongst existing and prospective members. Cllr Doug McMurdo of Bedfordshire Pension Fund is the Forum Chair.

• LAPFF provides a platform for discussion of investment issues and shareholder engagement for LGPS funds and pool companies. Member investment activities have important implications for beneficiaries, local communities, and the wider economy. The collective influence gained by members collaborating on common concerns has an impact in relation to the companies in which they invest.
• From October 2021 to September 2022 LAPFF engaged with 159 companies across a variety of sectors including oil and gas, banking, and mining. 19 voting alerts were issued, and LAPFF’s work has been covered by a wide variety of media outlets.
• Engaging on climate change as a systemic investment risk continued to be a high priority for LAPFF members, with the Forum engaging companies and stakeholders to commit to a fair and just transition. LAPFF continued its work on the ‘Say on Climate’ initiative led and wrote to all 385 FTSE All-Share companies asking them to publish a climate transition plan and put it to a vote at their AGM. Voting alerts were issued for several resolutions further to the Say on Climate initiative, including for BP and Standard Chartered. LAPFF advised members to vote in favour of a Follow This shareholder resolution calling on Shell to adopt more ambitious climate targets, in line with the Paris Agreement. Despite high global energy prices bolstering profits, this resolution secured the backing of 20 percent of shareholders. LAPFF also engaged with SSE, Drax, National Grid and ArcelorMittal about their climate transition plans.
• Human rights have been a significant focus for LAPFF over the course of the year. LAPFF has particularly focused on the impact of the global mining industry on human rights. This engagement has been most evident through LAPFF’s visit to Brazil to speak to affected community members and companies regarding mining and human rights in the wake of the Brumadinho and Samarco dam collapses in 2015 and 2019 respectively, and the inadequate action taken since then. Engagements with mining companies have been numerous, as have discussions with communities and local investors. LAPFF will continue to work with company boards to engage with, and understand how to use, community input in their decision-making and strategy-setting. LAPFF has engaged auto companies on human rights in their critical mineral supply chains, and issued voting alerts for tech companies, and has engaged on the issues of modern slavery, Uyghur forced labour and the Occupied Palestinian Territories.
• LAPFF has engaged with auditors and regulators on reliable accounts to ensure an enabling environment for good investor and corporate practice on climate change and to highlight issues arising from UKEB, IFRS17 and the transition from the FRC to ARGA.
• LAPFF also engages policy makers on a range of issues in a number of countries. LAPFF responded to a number of UK bodies, such as the Department for Transport on its ‘Jet Zero’ consultation, and the Committee on Climate Change’s Call for Evidence, as well as responding to the US State Department’s call for comments on the US National Action Plan on Responsible Business.
• LAPFF’s primary activity is stakeholder engagement around company ESG practices. LAPFF also engages with various stakeholder partners, including other investors, in this regard. LAPFF is a member of a number of collaborations, including Climate Action 100+ and Asia Research and Engagement. LAPFF works through ShareAction to engage companies on the Healthy Markets Initiative and contributes to the 30% Investor Club aiming to increase gender parity at board level.
• LAPFF continued to extend its reach through regular meetings of the All-Party Parliamentary Group (APPG) on Local Authority Pension Funds. This is chaired by Clive Betts MP, chair of the Departmental Select Committee for Levelling Up, Housing and Communities . LAPFF also continued its programme of fringe meetings during the party-political conference season with meetings organised at the Labour, Conservative, and SNP conferences.