As an active owner, we exercise our voting rights and engage with the companies or issuers we invest in to make sure they‘re accountable and fulfil their obligations to shareholders and other stakeholders. In addition, we continuously monitor the ESG practices and stewardship activities of our fund managers.
Our stewardship principles
As a long-standing supporter of the UK Stewardship Code and UK Corporate Governance Code, we welcome the revision to the UK Stewardship Code in 2020.
We are supportive of its aim to further improve the quality of engagement between asset owners, external managers and issuers, and the emphasis it has on establishing strong and transparent corporate governance practices.
Our minimum standards policy sets out our requirements for responsible conduct from our underlying issuers and external managers, which are aligned with internationally recognised norms or international conventions for controversial activities that are ratified into UK law.
We’re now in the process of enhancing our stewardship policy and practices to align with the revised Stewardship Code.
Our new policy will reflect our priorities in engagement with companies and bespoke voting policies for certain key themes.
The overarching themes that we engage on include climate change, human capital, diversity and inclusion, board composition and executive remuneration.
Working with external fund managers
We carry out in-depth reviews on our fund managers’ responsible investment approach, and assign ESG ratings as part of our selection and ongoing monitoring processes.
Our minimum standards policy sets out what we expect from the way fund managers and underlying issuers manage and disclose environmental, social and governance risks and opportunities. We expect our fund managers to integrate all relevant material factors into their investment analysis and decisions, and demonstrate active stewardship of both equity and debt holdings.
We work in partnership with our fund managers to continuously incentivise them to evolve their processes. Our expectations vary between different asset classes, depending on relevance (such as time horizons or types of instruments used) and current best practice.
How we monitor our portfolio
We encourage better fund-specific ESG reporting from our external fund managers and have expanded our in-house expertise and ESG data to better track and manage our risk exposure, report transparently to our stakeholders, and communicate regularly with our managers.
We also appoint external agents who monitor our segregated portfolio companies for environmental, social and governance risks, and where concerns arise, engage and vote on our behalf with companies.
Our collaborations and memberships
To achieve positive change across pensions, investments and financial markets, we collaborate with a range of organisations to have a bigger platform and voice.
Some of the important market-wide issues that we collaborate on include climate change, diversity and inclusion, corporate governance and disclosure.
Our collaborations and memberships include:
- PRI signatory since 2007; our Head of ESG currently sits on the PRI's Infrastructure Advisory Committee
- Membership of the UK Pension Scheme Responsible Investment Roundtable and the UK Sustainable Investment & Finance Association (UKSIF)
- Investor membership of a range of climate initiatives, including the CDP disclosure initiative, the Institutional Investors Group on Climate Change (IIGCC), Climate Action 100+ and the Transition Pathway Initiative (TPI)
- A supporter of the FSB’s Task Force on Climate-related Financial Disclosures
- Membership of the Institutional Limited Partners Association (ILPA) and the British Private Equity & Venture Capital Association (BVCA)
- Membership of the Diversity Project (with PPF representation on its Advisory Committee and Steering Committee) and a signatory to HMT’s Women in Finance Charter