The Head of Responsible Investment presented the report which provided an update on the Responsible Investment (RI) activity and reporting of the company. An update was also provided on engagement supporting priority themes, both direct and through involvement in collaborations, voting, and other RI activity. The Stewardship Manager reported on the voting records of Border to Coast and Robeco and further explained the recent engagement with BP as covered in the report. The Stewardship Manager had attended BP’s AGM at which the company had voted against a number of agenda items and explained that Border to Coast was regarded as a leading shareholder in holding BP accountable for its “strategy reset” and its opposition to weakened climate targets and transition plans was regarded as significant by peers. It was explained that the company’s plan was to continue this engagement and that further meetings with BP and Robeco have been scheduled.

Cllr Hopton shared that he had received correspondence from a scheme member querying whether such voting against BP compromised its fiduciary duty to scheme members and added that this highlighted that scheme member views and understanding of RI were varied.

The Stewardship Manager explained that such engagement and escalation was part of plans to maintain long term viable and profitable investments rather than acting in an ‘activist’ capacity. It was reiterated that all decisions were made with investment performance as a priority and that securing adequate long-term returns required implementing such RI policies to ensure investments were sustainable. It was explained that RI policies were designed with the aim of ensuring the best long-term returns for scheme members rather than being based on any moral or ethical judgements.

Members asked what confidence the company had that the best returns were being made now that some companies and fund mangers were moving away from climate targets and plans that align with Border to Coast’s RI plans. It was also asked whether BP had scaled back their plans as they had initially been significantly more ambitious than the rest of the sector and whether moving away from climate targets was becoming a trend.

The Head of Responsible Investment explained that the company’s investment philosophy focussed on long-term investment and that investment performance reports supported this approach. It was explained that the goal was to encourage businesses to become good long-term investments by supporting resilience and sustainability.

The Stewardship Manager explained that some companies in the sector, such as BP, had scaled down their climate targets and plans but that others, such as Total and Shell remained committed to agreed targets. It was explained that publicly declaring Border to Coast’s votes against BP ahead of their AGM was an escalation of engagement designed to draw attention to BP’s significant backtracking against no or minimal changes in the climate plans of the rest of the sector.

Members asked for further detail on the Good Work Coalition and on ‘red-lines’ for engagement.

The Stewardship Manager explained that the Good Work Coalition was a coalition of investors led by ShareAction to engage with businesses on the Living Wage and on Ethnicity Pay Gap reporting. It was explained that Border to Coast joined the coalition in 2024 and that a large number of investors have also joined and continue to join the coalition to affect change.

The Stewardship Manager said ‘red-lines’ were not included in Border to Coast’s engagement and escalation plans but that the focus was always on taking any action to promote sustainable, long term investment to serve scheme members.

RESOLVED – Members noted the report.

Exclusion of the Public and Press RESOLVED – That under Section 100(A) of the Local Government Act 1972, the public be excluded from the meeting for the following items of business on the grounds that they involve the likely disclosure of exempt information as defined in paragraph 3 of Part 1 of Schedule 12A of the Act and the public interest not to disclose information outweighs the public interest in disclosing it.