Proudly protecting £350bn of local authority pensions by promoting the highest standards of corporate governance and corporate responsibility.
What LAPFF Does
LAPFF promotes the highest standards of corporate governance to protect the long-term value of local authority pension funds.
For LAPFF and its members, corporate responsibility and long-term shareholder value are two sides of the same coin. Our members have investments in many of the largest global companies and we see first-hand the costs when things go wrong – company’s reputations with customers irrevocably damaged, companies fined billions for not adhering to the rules and excessive risk taking resulting in corporate bankruptcies.
That is why, acting together with the majority of the UK’s local authority pension funds and pool companies, the Forum proudly leads the way on issues such as executive pay, reliable accounting and a just transition to a net zero economy. And is prouder still to realise significant and tangible improvements in the practices of some of the world’s biggest corporations.
We are able to do so by working together. With members’ assets exceeding £350bn, the Forum engages directly with company chairs and boards to affect change at investee companies. We recognise that the role of responsible investors is not just to engage companies but also stakeholders, such as employees and local communities, to understand their views on a company’s behaviour and risks. Some issues extend beyond the behaviour of individual companies to the way markets function. That is why we challenge regulators and deliver reforms that advance corporate responsibility and responsible investment.
With our shared understanding of the financial importance of corporate responsibility, LAPFF and our members are able to safeguard the value of pension funds which now and in the future will support millions of people in retirement.
Councillor Doug McMurdo
How LAPFF Works
Our approach is different. Rather than organisations engaging companies on our behalf, we do the engagement ourselves as pension fund trustees and asset owners. The engagement is not only led by us, but as a member-led Forum the focus is on what is truly important to us.
Each year the Forum engages with hundreds of companies, many directly with company chairs. This is made possible by building trust and having a two-way dialogue about corporate responsibility. However, we do not want to have dialogue for its own sake. Our focus is on improving the policies and practices of companies, which we believe is best achieved by having constructive but robust conversations. This approach is not always successful and progress can be too slow. When this happens we don’t walk away. Instead, we escalate our engagements. This may include providing voting recommendations to members for company AGM proposals to directly effect change. To leverage engagement outcomes, we often work with other asset owners and managers.
The Forum participates in several multi-trillion pound collaborations to amplify our voice and accelerate change. Our understanding of problems facing companies and ability to voice concerns is enhanced by also engaging with company stakeholders.
For our responsible investment objectives to be relevant in a rapidly changing economy we have to stay ahead of emerging trends. The Forum produces reports on issues such as the investment risks of climate change and shortcomings in the accounting system long before they became mainstream investor concerns. This investment in thought leadership not only helps inform our engagement programme but also the public policy debate, which is progressed through the Forum’s backed All-Party Parliamentary Group, hosting of regular party conference fringe meetings and work with politicians and policymakers. This policy dimension, alongside the provision of training also supports our members in their own responsible investment activities.
Representing asset owners directly in companies and stakeholder engagement and developing and pursuing our own agenda not only makes the Forum’s approach unique, but all the more effective for it.