The Lincolnshire Council Pensions Committee met on 18 September 2025 to discuss the independent advisor's market update and a stewardship update report. The committee reviewed the performance of global investment markets and discussed stewardship activities undertaken during the first quarter of the financial year. They also agreed to exclude the press and public from the meeting to discuss exempt information.

Independent Advisor's Market Update

The committee received a report from their Independent Advisor on the current state of global investment markets. The report covered the period from April 2025 to June 2025. It noted that despite considerable geo-political challenges, there had been remarkable resilience in equity markets, with global equities up by approximately 12% per year over ten years.

The report highlighted several competing economic forces, including:

• Modest growth, persistent inflation, and a challenging fiscal position in the UK.
• Tariff/trade war uncertainty and the impact of the Big Beautiful Bill in the US.
• Ongoing conflict in both Ukraine and the Middle East.

The advisor noted that currencies, rather than markets themselves, had been a material contributor to performance this quarter, specifically US dollar weakness. They also noted that equities overall performed well, with a reversal in fortunes in the technology sector, and that bonds also did reasonably well.

The report concluded by noting that US tariffs are still expected to be negative for growth and create inflationary pressures, and that further currency volatility is something to watch out for.

Stewardship Update Report

The committee received a report providing an update on stewardship activity during the first quarter of the financial year 2025/26 (April - June inclusive). The report outlined how the Lincolnshire Pension Fund interacts with key stakeholders to ensure investments are well managed and performing as expected. The Fund's approach to stewardship activity is largely through the use of external professionals, as the Fund operates with a small internal team.

The Fund works with:

• The Local Authority Pension Fund Forum (LAPFF) - who engage directly with company chairs and boards to affect change at these companies.
• Border to Coast Pensions Partnership - who represent Lincolnshire Pension Fund and the other partner funds.
• Robeco - who are appointed by Border to Coast to provide voting and engagement services for all Border to Coast propositions.
• Other investment managers used by the Fund, including Morgan Stanley, who carry out their own stewardship activity at the asset selection stage and throughout the time an asset is held.

The report provided a summary of various stewardship activities that have been undertaken on behalf of the Fund during the quarter and updates the Committee on any new initiatives relating to good stewardship.

LAPFF Engagement

LAPFF engaged with 24 companies over the quarter on issues surrounding executive governance, human rights scrutiny, and water stewardship. Highlights included:

• Conversations with Freeport-McMoRan (FCX) around publishing their global metrics on human rights.
• Continued dialogue with the luxury goods sector (specifically Moncler and LVMH) around human rights and supply chain management.
• An engagement was completed with Glencore regarding their progress with water stewardship activities.

As a member of Asia Research and Engagement (ARE ), LAPFF were offered the opportunity to participate in the Taiwan in the World: Sustainability Breakthrough and Responsible Investment Dialogue conference. This involved direct engagements with several Taiwanese companies across the semiconductor and finance sectors.

Border to Coast Pensions Partnership

Border to Coast is a strong advocate of stewardship and responsible investment (RI) and believes that businesses which are governed well and run in a sustainable way are more resilient, able to survive shocks, and have the potential to provide better financial returns for investors.

Q1 2025/26 is peak voting season. This quarter saw Border to Coast voting at 697 meetings, covering 10,452 agenda items. In 13% of meetings, Border to Coast cast at least one vote against the recommendations of management.

An example from the quarter, Border to Coast supported three shareholder proposals at the HomeDepot AGM. These were to: request a policy to separate the roles of CEO and Chair of the Board; request a biodiversity assessment to inform the company's approach to nature-related risks and opportunities; and setting time-bound goals for making all its packaging recyclable, reusable or compostable.

Engagement activity included 490 engagements carried out by: external managers appointed by Border to Coast; Robeco, as the Pool's engagement and voting manager; internal portfolio managers; and by LAPFF.

Border to Coast – Robeco

During the quarter, Robeco have engaged with companies on 72 occasions on topics including: good governance; fashion transition; and UN Sustainable Development Goals (SDG ) Engagement. This quarter's report provided commentary on the importance of good governance, and how after decades of improvements the pendulum of good governance seems to be swinging back in the favour of corporate management.

Other Managers

During the quarter, a number of milestones were achieved by underlying managers within the Morgan Stanley portfolio:

• A new biogas development asset was acquired, which will bring benefits including the sustainable generation of organic fertilizer; and
• A leading clean fuels filling station platform for road transport has been invested in, with a core focus on decarbonising the HGV fleets of large logistics companies.

Royal London Asset Management (RLAM ) advanced its approach to biodiversity by establishing their first biodiversity strategy. With support from specialist consultants, a natural capital baseline was assessed, and enhancement opportunities were identified. The biodiversity strategy has four key principles:

• Enhance biodiversity through nature-based interventions
• Deliver social value by creating natural spaces that support occupiers and the wider community
• Embedding biodiversity led designs to help mitigate flood risk
• Demonstrating market leadership by setting ambitious targets and supporting innovation.

Voting

To enable the Fund to fulfil its stewardship responsibilities as an active shareholder, the active equity managers are required to report on their voting on a quarterly basis.

Border to Coast produces summary proxy voting reports. During the quarter:

• Global Equity Alpha 244 meetings were attended, and 3,335 votes were cast. At 169 meetings one or more votes were cast against management recommendations. This amounted to 438 (13.13%) proposals from management that were voted against.
• Overseas Developed Markets Equity 151 meetings were attended, and 2,552 votes were cast. At 109 meetings one or more votes were cast against management recommendations, this amounted to 280 (10.97%) proposals from management that were voted against.
• UK Listed Equity 49 meetings were attended, and 1,060 votes were cast. At 39 meetings one or more votes were cast against management recommendations, this amounted to 71 (6.70%) proposals from management that were voted against.

Border to Coast - Environmental, Social and Governance (ESG) Reporting

Border to Coast have worked with MSCI, the investment research company, to provide quarterly ESG and carbon reports. The reports include an ESG rating, weighted score for the quarter and the direction of travel. There is also information on carbon emissions and intensity, as well as the best and worst rated companies in each sub-fund.

The below table summarises the development of each sub-fund over the last quarter:

Stewardship Code 2024/25

The Financial Reporting Council (FRC) Stewardship Code sets high stewardship standards for those investing money on behalf of UK savers and pensioners, and those who support them. The Fund became one of the first Local Authority Pension Fund signatories to the Code, following submission of a report for 2020/21, and has been successful every year since. The submission for 2024/25 is currently being completed and will be brought to a future Committee meeting.

A revised UK Stewardship Code 2026 has been released and will be effective from 1 January 2026. The Fund will implement this revised guidance as part of its 2025/26 submission in Autumn 2026.

Exclusion of Press and Public

The committee moved that under section 100A of the Local Government Act 1972, the press and public be excluded from the meeting for the following items of business. This was because the items contained exempt information as defined in paragraph 3 of part 1 of Section 12A of the Local Government Act 1972, as amended. The exempt items were:

• LGPS 'Fit for the Future' Update
• Annual Report on the Fund's Property and Infrastructure Investments
• Investment Update and Manager Performance Report
• Manager Presentation - Border to Coast Pensions Partnership - Externally Managed Equities
• Investment Philosophy and Strategy Training