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, concerning investment updates and a presentation from Morgan Stanley Private Markets, will be discussed in private due to the confidential nature of the information.

Border to Coast Pensions Partnership 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 Partnership (BCPP). These policies are reviewed annually to reflect best practices and the views of the Partner Funds.

Key proposed changes to the Responsible Investment Policy include:

• Lowering the thermal coal power generation exclusion threshold from 50% to 25% in developed markets, and from 70% to 50% in emerging markets.
• Clarifying BCPP's stance on engagement, escalation, divestment, and exclusions, including the addition of an engagement definition.
• Introducing a new voting policy targeting nature laggards.

Proposed changes to the Corporate Governance and Voting Guidelines include:

• Implementing a nature risk priority framework to address nature-related risks beyond deforestation.
• Updating the policy to address anti-ESG resolutions.

The Climate Change Policy has been updated to remove exclusion threshold details, with all references to exclusions now included within the Responsible Investment Policy.

Following endorsement of the BCPP policies, 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

The committee will receive an update on stewardship activity undertaken during the second quarter of the financial year 2025/26 (July - September inclusive). This will include updates from the Local Authority Pension Fund Forum (LAPFF), Border to Coast, Robeco and Morgan Stanley.

The report pack highlights that LAPFF engaged with 25 companies over the quarter on issues including environmental risk, human rights, climate change and remuneration. Highlights include:

• Meetings with cement suppliers Heidelberg and CRH, focusing on the credibility of their decarbonisation strategies.
• Engagement with Pennon and Severn Trent Water, exploring the companies' responses to rising sewage spill scrutiny, PFAS contamination and sustainable water usage.
• Leading a meeting with Pfizer as part of the Nature Action 100 initiative, and writing to major agricultural businesses to highlight TNFD-aligned nature disclosures.

The report pack also notes that Border to Coast's Stewardship Manager chairs the IIGCC Just Transition Working Group, and presented to mining companies on the importance of integrating a just transition¹ and to global banks on investor expectations of the banking sector.

Investment Market Update

The committee will receive a report from its Independent Advisor, Paul Watson, providing a market commentary on the current state of global investment markets, covering the period July 2025 – September 2025. The report pack states that despite ongoing geo-political challenges, there has been remarkable resilience in equity markets, with global equities up by approximately 14% per annum over ten years.

Exempt Information

The committee will also consider exempt information relating to an Investment Update and Manager Performance Update, and a presentation from Morgan Stanley Private Markets. These items will be discussed in private, as they contain exempt information as defined in paragraph 3 of Part 1 of Schedule 12A of the Local Government Act 1972.