Agenda item

[To receive an update on the work undertaken in relation to responsible investment activities.]

Shiventa Sivanesan, Assistant Director – Investment Management and Stewardship, presented the report on the work undertaken in relation to responsible investment activities since the last Pensions Committee meeting.

The Assistant Director advised the Committee that the Fund had submitted its second annual Stewardship Report to the Financial Reporting Council (FRC) for assessment against the principles set out in the 2020 UK Stewardship Code. The 2022 report includes details of the stewardship activity undertaken over the calendar year 2021.

It was noted that the draft version of the Fund’s Voting Principles as shared with the Committee at the previous meeting had now been finalised, strengthening the Fund’s voting principles in a number of areas.

The Fund continues its policy of engaging investors through a collaborative approach with investment partnerships, to improve outcomes and drive change, most notably through the Local Authority Pension Fund Forum (LAPFF) and the LGPS Central pool.

The Fund continues to engage on a wide range of issues, prioritising the engagement themes as set out in the Responsible Investment Framework:

·       Climate Change

·       Sustainable Food Systems

·       Human Rights

·       Responsible Financial Management.

It was noted that the Fund continues to receive requests and queries from members of the public in relation to a range of issues including climate change, human rights and investments in defence companies. The Fund continues to review and respond to correspondence, signposting activity and action across a wide range of responsible investment initiatives.

Malcolm Cantello, Trade Union Representative congratulated Officers on the production of the Fund’s Voting Principles and the Annual Stewardship Report.

In response to a question from Cllr Hyatt requesting further details on engagements that had taken place, the Director of Pensions confirmed it was recognised that work was ongoing to refine and report measures of success to enable review of progress over time.

In response to a question from Cllr Gough, the Assistant Director -Investment Management and Stewardship confirmed that investments in low-cost passive equity index strategies were reducing as the Fund moved to more sustainable and climate-aware strategies.

Resolved:

1. That the Pensions Committee notes the Fund’s second Annual Stewardship Report submitted to the FRC in April 2022, which sets out stewardship activities undertaken by the Fund and its investment partners over 2021. The report is available on the Fund’s website: West Midlands Pension Fund - Stewardship (wmpfonline.com)
2. That the Pensions Committee notes the Fund’s Voting Principles, which have been finalised and published on the Fund’s website following the draft version that was presented at the March Pensions Committee meeting: - West Midlands Pension Fund - Voting Globally (wmpfonline.com)
3. That the Pensions Committee notes the Fund’s engagement and voting activity for the three months ending 31 March 2022 [Appendices A and B].
4. That the Pensions Committee notes the issues discussed by LAPFF are set out in the Quarterly Engagement Report, which is available on the LAPFF website: LAPFF-QER-2022-Q1.pdf (lapfforum.org)
5. That the Pensions Committee notes the voting and engagement activity of LGPS Central, as set out in the Quarterly Stewardship Report, available on the LGPS Central website: LGPSC-Stewardship-Update-Q4-2021-2022.pdf (lgpscentral.co.uk)
6. That the Pensions Committee notes the research and engagement activity undertaken by EOS at Federated Hermes as set out in the Quarterly Engagement Report, which is available on the EOS website: EOS Public Engagement Report (hermes-investment.com)