The Pensions Committee of Lincolnshire Council is scheduled to meet on Thursday, 11 December 2025, to discuss a range of topics including investment market updates, stewardship activities, and responsible investment policies. The committee will also review and endorse the policies of Border to Coast Pensions Partnership. Some items, relating to investment updates and manager performance, will be discussed in a closed session due to the confidential nature of the information.

Border to Coast Policies

The committee will be invited to review and endorse the Responsible Investment Policy, Corporate Governance and Voting Guidelines, and Climate Change Policy of Border to Coast Pensions Partnership¹. These policies are scheduled to go live in January 2026. According to the report pack, Border to Coast reviews these policies annually to incorporate best practices and the perspectives of its partner funds. The key proposed changes to the Responsible Investment Policy include:

• Exclusions - Thermal Coal: A proposed lowering of the thermal coal power generation exclusion threshold from 50% to 25% in developed markets, and from 70% to 50% in emerging markets.
• Engagement, Escalation and Exclusions: Clarification of Border to Coast's stance on engagement, escalation, divestment and exclusions, including the addition of an engagement definition.
• Nature: Introduction of a new voting policy targeting nature laggards.

Proposed key changes to the Corporate Governance and Voting Guidelines include:

• Nature: Implementation of a nature risk priority framework to address nature-related risks beyond deforestation.
• Anti ESG Resolutions: An update to the policy to address anti-ESG resolutions and acknowledge those that appear pro-ESG but aim to reverse corporate commitments.

The report pack notes that the Climate Change Policy has been updated to remove exclusion threshold details, with all reference to exclusions now contained within the Responsible Investment Policy.

The committee will also be asked to agree to align the Lincolnshire Pension Fund's own Responsible Investment Policy and Corporate Governance and Voting Guidelines with those of Border to Coast.

Stewardship Update

Claire Machej, Accounting, Investment and Governance Manager, is scheduled to present a stewardship update report, covering the period July to September 2025. This report will provide an overview of various stewardship activities undertaken on behalf of the fund, including those by the Local Authority Pension Fund Forum (LAPFF), Border to Coast, Robeco, and Morgan Stanley.

The report pack highlights outcomes achieved through LAPFF engagement, including:

• Meetings with Heidelberg and CRH, focusing on the credibility of decarbonisation strategies.
• Engagement with Pennon and Severn Trent Water, exploring the company's responses to rising sewage spill scrutiny and sustainable water usage.
• Continued engagement with the Nature Action 100 initiative, including leading an investor meeting with Pfizer.
• Expanded engagements with Eni, TotalEnergies, and a series of Australian banks, on heightened human rights due diligence in conflict zones.
• Meetings with multiple companies who have seen high levels of shareholder dissent over the need for stronger pay-performance alignment and transparency.
• Responding to the UK Sustainability Reporting Standards consultation.

The report pack notes that Border to Coast's Stewardship Manager chairs the IIGCC Just Transition Working Group, and that during the quarter he presented to mining companies on the importance of integrating a just transition² and to global banks on investor expectations of the banking sector. The report pack also notes that Border to Coast supported a shareholder proposal requesting quantified reporting on the pesticide use reductions at General Mill, and that engagement activity included 404 engagements carried out by external managers, Robeco, internal portfolio managers, and by LAPFF.

Independent Advisor's Market Update

The committee is scheduled to receive a report from its Independent Advisor, Paul Watson, providing a market commentary on the current state of global investment markets for Q2 2025/26 (July - September 2025). The report pack includes a review of market performance during this period, with data on various indices including the FTSE All Share, MSCI AC World, and UK Gilts.

The report pack notes that despite ongoing geo-political challenges, there has been remarkable resilience in equity markets, and that over ten years global equities are up by approximately 14% per year.