The Hampshire Pension Fund Responsible Investment Sub-Committee met on 5 September 2025, and among other business, reviewed scheme member communications, and the stewardship of the Pension Fund's assets. The sub-committee noted the communications received from scheme members on Responsible Investment (RI) and agreed that the Pension Fund will publish its sixth annual RI update for scheme members.

Scheme Member Communications and Responsible Investment Survey

The sub-committee reviewed a report from the Director of Corporate Operations on scheme member communications, including the results of a consultation with Local Government Pension Scheme (LGPS) stakeholders regarding the fund's approach to Responsible Investment (RI).

The report highlighted that the Pension Fund had received correspondence from scheme members about the conflict in Israel and Gaza, and whether any of the companies that the Pension Fund invests in are linked to the conflict. The Fund clarified that while it has a small exposure to companies whose products may potentially be used in the conflict, it has no exposure to controversial weapons.

The 2025 RI survey received a significantly higher response rate than the 2022 survey, with 6,149 responses compared to 701 previously. Key findings included:

• Employers were generally aware of the Fund's RI policy, but less than 40% knew about actions taken to reduce climate change risk.
• Both employers and scheme members identified slavery and child labour as a top ESG factor to consider when making investment decisions, alongside action to tackle climate change.
• A number of respondents expressed concerns about war and conflict, with some requesting disinvestment from companies linked to Israel, while others argued that investing in defence is essential for national security.
• Some respondents felt that ESG should not be prioritised over financial returns, while others believed that net zero targets were not ambitious enough.

In response to the survey findings, the Pension Fund plans to provide a summary report to scheme members and increase its efforts in RI reporting. It will also work with investment managers to identify companies with the greatest risk of slavery or child labour in their supply chains.

The sub-committee agreed to note the report, including the significant response to the 2025 RI survey, and recognised the interest of scheme members in the risk of slavery and child labour as a priority ESG risk for the Pension Fund.

Stewardship Highlight Report

The sub-committee received a report from the Director of Corporate Operations providing information regarding the Pension Fund's investment managers' stewardship of the Pension Fund's assets.

The report provided information on the fund's compliance with the UK Stewardship Code¹, its approach to controversial weapons, and examples of engagement activities undertaken by its investment managers.

The report noted that the Pension Fund had successfully retained its Stewardship Code signatory status with the Financial Reporting Council (FRC). It also confirmed that all of its investment managers have policies in place to exclude investments in controversial weapons, defined as those subject to widespread bans or restrictions by international agreements², such as cluster bombs, landmines, and chemical and biological weapons.

The report included examples of engagement activities aligned with the UN Sustainable Development Goals (SDGs), covering a range of assets including equities, credit, and non-listed investments. These examples demonstrated how investment managers are using their influence to encourage investee companies to improve their ESG performance.

The report also provided a summary of voting highlights for the period January to June 2025. It noted that a misinterpretation of ACCESS's policy on casting votes in respect of shareholder resolutions had resulted in voting opportunities being missed at 65 shareholder meetings by Acadian. This issue is being addressed to ensure that the ACCESS voting policy is applied as intended going forward.

The report highlighted the impact of anti-ESG sentiment in the United States, with a decline in environmental proposals being voted on. It also noted that the National Center for Public Policy Research (NCPPR), a conservative US think-tank, had filed several anti-DEI (diversity, equity and inclusion) proposals at multiple companies, which had been unsuccessful.

The report included a table summarising the number of votes cast by the Fund's investment managers, and highlighted instances where investment managers had voted against company management on issues such as director elections, remuneration policies, and auditor appointments. It also noted instances where the Pension Fund's investment managers had voted differently on the same point, which is hoped can be resolved by the Pension Fund's new investment pool.

The sub-committee agreed to note the report, including the Pension Fund's retention of its UK Stewardship Code signatory status, how the Pension Fund's investment managers have voted in the Fund's portfolios and engaged with the management of these companies, and the progress that has been made in respect of excluding controversial weapons from the portfolio.