SPF has developed an approach to RI that is very different to the LGPS peer group. In addition to the common approach of joining LAPFF the Fund has used its own voice to take a more active/direct role in collaborative work. The Fund has employed a Global Compact focused Swedish engagement overlay specialist as opposed to fully outsourcing its RI efforts to a typical UK based provider. The Fund has also decided to leave its voting with its external investment managers as the relevant experts. The Fund prefers to engage with those managers on voting outcomes. The Fund centres its RI work on engagement and uses the GES international norms/Global Compact based sytem to that effect. The Fund is clear in it understanding of fidicuary duty and does not seek to influence the external managers investment process but rather act as an active owner and engage in depth with portfolio companies in regard to the norms. The Fund believes this approach is better aligned with the fidicuary duty and protection of value and ultimately more responsible than a ethical or values based exclusion policy. The Fund works in partnership with its managers and includes ESG scored metrics in its manager RFP's to try and hire only those best suited to provide compliance with the Fund's RI policy. The dedicated RI report to the trustees is a public document that discloses in full the manager, Fund and overlay RI activity on a quarterly basis. The Fund also discloses voting activity and exceptions in this report and on its website. This transparency is not typical of the LGPS peer group. The annual meeting and annual report are both used to report the Fund's RI work on an annual basis.
The Fund has also stepped up its 'impact' investing through the 'Direct Investment Portfolio'.
LAPFF compiled a guide on co-filing shareholder resolutions for its members in order to explain and facilitate the co-filing process.
A prominent activity since 2014 has been attendance at company AGMs by Executive members and other LAPFF fund representatives. There were increasing levels of company take-up of meetings in response to this AGM attendance.
LAPFF sometimes works collaboratively with other investors. There are two investor coalitions LAPFF has set up or participated in since inception. One to address fundamental concerns about the international accounting framework, which LAPFF views as providing an inaccurate and potentially misleading picture of companies’ financial position. This has serious implications for financial stability in the UK and for many other countries that have adopted IFRS.
The second coalition has been LAPFF’s participation in the £230bn ‘Aiming for A’ investor collaborative engagement initiative. LAPFF and other coalition members have engaged with the ten largest UK-listed utilities and extractives firms with the aim of encouraging transparency over risks and opportunities to the business model from climate change. As part of this initiative, a significant number of LAPFF member funds co-filed strategic resilience resolutions to the 2015 Shell and BP AGMs and to the Anglo American, Rio Tinto and Glencore2016 AGMs