The Lincolnshire Council Pension Committee met on Thursday, 16 April 2026, to review market performance and the fund's stewardship activities. Key discussions included the performance of global equities and bonds in the final quarter of 2025, and the extensive stewardship efforts undertaken by the fund's partners, such as the Local Authority Pension Fund Forum (LAPFF) and Border to Coast Pensions Partnership.

Independent Advisor's Market Update Report

Paul Watson, the Independent Advisor, presented an update on global investment markets for the period of October to December 2025. He reported that equities finished the year strongly, with global indices rising consistently and many reaching record levels. This positive performance was attributed to broad investor confidence. Notably, the market saw a broader rise across various regions and sectors, rather than being solely led by large US tech stocks. Global equities rose by approximately 14.5% over the year.

However, Mr. Watson also highlighted the impact of currency fluctuations, stating that a weaker US dollar led to an approximate 8% reduction in returns for sterling investors. Global bonds delivered modest positive performance, acting as a diversifier in a low-rate environment. Precious and industrial metals also saw an increase, driven by safe-haven demand.

Looking at performance so far in 2026, Mr. Watson noted a volatile period for equity and bond markets, primarily due to geopolitical tensions. While markets performed surprisingly strongly in the first two months amidst tensions in Venezuela and Greenland, this receded in March due to increased concerns about inflation stemming from the conflict in Iran. The closure of the Strait of Hormuz significantly impacted oil supplies, leading to a 60% rise in Brent crude in March and contributing to expected higher inflation. In response, central banks paused expected rate reductions, and markets began anticipating rate rises. This has led to increased borrowing costs for the US and UK governments, with the 10-year gilt yield reaching 4.9%, its highest since 2008.

Stewardship Update Report

Claire Machej, Accounting, Investment and Governance Manager, presented the Stewardship Update Report, detailing the fund's stewardship activities during the third quarter of the financial year 2025/26 (October to December 2025). The report highlighted the fund's engagement with various stakeholders, including the Local Authority Pension Fund Forum (LAPFF), Border to Coast Pensions Partnership, Robeco, and other fund managers, to ensure investments are well-managed and performing as expected.

Key activities from LAPFF included issuing climate transition plan letters to FTSE 100 companies and assessing the commercialisation of low and no-carbon steel production. LAPFF also engaged with companies operating in Conflict-Affected and High-Risk Areas (CAHRAs), issuing a voting alert against Microsoft. Councillor Mrs Jacqueline Brockway inquired about the liability associated with such voting alerts, and it was clarified that these are advisory and not binding, with Border to Coast making the final voting decisions based on their own assessments and advice from Robeco.

Border to Coast's stewardship efforts were also detailed, including their voting activity at 202 meetings and engagement with 664 companies. A significant point of discussion was Border to Coast's vote against management recommendations at BP's AGM in April 2025, where they opposed the re-election of the Chair and other directors due to governance failures related to BP's climate strategy. Councillor Martin John Hill OBE questioned the rationale behind this vote, given BP's shift back to traditional areas of expertise. The committee agreed to seek further explanation from Border to Coast regarding their voting intentions for the upcoming AGM season and their exposure to BP across various funds.

Robeco, appointed by Border to Coast for voting and engagement services, engaged with companies on topics including UN Sustainable Development Goals and environmental, social, and governance (ESG) issues. Robeco's engagement themes for 2026 include Physical Climate Risk, Responsible AI, and EU sovereign climate policy engagement.

The report also covered ESG and carbon reporting for Border to Coast's sub-funds, noting modest increases in ESG scores for Global Equity Alpha and Overseas Developed Equity. The fund's continued signatory status to the Financial Reporting Council (FRC) Stewardship Code was confirmed.

Training and Other Matters

Councillor Condell, Chairman of the Committee, reminded members of the legal requirement to complete training on pension schemes, with Jo Balchin offering assistance. The meeting also included the approval of the Lincolnshire Pension Fund Business Plan and the Cyber Security Policy. Discussions also touched upon the potential impacts of Local Government Reorganisation on the Pension Fund, with assurances that individual scheme members' benefits would not be affected. The committee also approved proposed changes to the Shareholders' Agreement and Inter-Authority Agreement for Border to Coast.