The Assistant Director – Investment Strategy presented the Quarter 4 Responsible Investment Update, covering the likes of company engagement and emissions data. He further explained the recent engagement Border to Coast Pensions Partnership had undertaken with BP following BP’s strategy reset in Q1 2025, which weakened its climate targets and transition plan. It was explained that, as part of Border to Coast’s engagement escalation, they had signalled their concern by publicly pre-declaring they were voting against the re-election of the Chair of the Board and voting against acceptance of the annual report and against approval of the remuneration report. It was explained that a significant number of shareholders (24%) voted against the re-election of the Chair of the Board and that Border to Coast Pensions Partnership will continue to escalate, which may incorporate co-filing a resolution with BP. It was explained that there was currently no formal process in place at Border to Coast for divestment based solely on a failed engagement but this is an aspect of responsible investment which, among others, will be discussed between SYPA, Border to Coast and the other Partner Funds over the coming months.

Members asked for a timeline on the next stage of engagement with BP and more clarity on what would happen if engagement continued to fail to give the required outcomes for Border to Coast Pensions Partnership and the Authority.

The Assistant Director – Investment Strategy explained that there was no confirmed timeline in place and that it was still early in the engagement process with many aspects to consider before making any significant decisions. The Director added that Border to Coast Pensions Partnership would be undertaking their annual responsible investment policy review and that this would look at the escalation process associated with engagement.

Members asked for further detail on growing tensions between asset managers (such as BlackRock) withdrawing from key climate initiatives, whereas many investors continue to believe in the importance of these initiatives. In many cases – but not all - it has tended to be US managers leaving climate initiatives given the political climate

in the States. The Independent Investment Adviser explained that some alliances between asset managers and investors in the industry have been negatively affected over such matters. This period of change, however, has arguably made it more clear to the industry which asset managers were actually fully committed to responsible investment and which asset managers had been acting performatively and simply following prevailing trends.

Members welcomed the updates on engagement but asked whether there had been any engagement with Israeli companies held within the portfolio - when and why the decision was made for Border to Coast Pensions Partnership to invest in Israeli Government bonds.

The Assistant Director – Investment Strategy explained that he was not aware of any engagement but that he would follow this up with colleagues at Border to Coast Pensions Partnership for confirmation. The Assistant Director – Investment Strategy added that he would ask Border to Coast Pensions Partnership to provide rationale on the timing and decision of Border to Coast Pensions Partnership to invest in Israeli Government bonds and report back to Authority members.

RESOLVED: Members noted the activity undertaken in the quarter.