Highlights include:
Three industry initiatives that have been instrumental in supporting company engagement
Improved disclosure of data to analyse company progress towards a Net Zero global economy
Improved integration of ESG reporting across internal portfolios
Continued efforts in proxy voting, a co-filed shareholder resolution at Shell plc, plus full disclosure on voting records published on the PPF’s website
The Pension Protection Fund (PPF) has today published its fifth Responsible Investment report, which reinforces its commitment to promoting sustainability in the pensions industry and demonstrates the power industry engagement and collaboration across its asset managers, portfolio companies, industry bodies and peers has had over the last 12 months. The annual report summarises the stewardship and governance activities carried out by the PPF that have not only driven greater participation and engagement industry wide, but also have improved reporting, risk analysis, transparency and driving positive change. As a result, the PPF has received recognition from three awarding bodies and, in the last reporting year, was accepted by the Financial Reporting Council (FRC) as a 2023 signatory for the third consecutive year.
Barry Kenneth, Chief Investment Officer at the PPF said: “The last 12 months has been a period of evolution and engagement, and this report outlines our continued commitment to align with the Stewardship Code, showcasing the steps we have taken and measures we have advanced to protect and drive value across our portfolio. We have made huge strides in disclosure, transparency of data and reporting, as well as improving efficiencies across the team. But more than anything, this has very much been a year of engagement for the PPF, particularly in relation to the current shape and future opportunities of the pension industry. Our experience and unique position in the industry has meant we can not only drive change via enforcing shareholder rights, but via our service on the DWP’s Taskforce for Social Factors and other initiatives such as the UK Asset Owner Council, we have been able to drive pension funds forward in important areas for stewardship for years to come.”
In ensuring its investments are supportive of a fairer and sustainable future, the PPF engaged through its engagement service provider with 667 companies on specific ESG issues and objectives, achieving significant progress with almost half (49 per cent). The PPF has also seen progress on engagement objectives for 33 per cent of its Climate Watchlist companies, as well as seeing 90 per cent of the Climate Watchlist companies report to disclosure organisation CDP.
As well as co-filing a shareholder resolution at Shell plc in relation to its emissions reduction strategy, the PPF voted on over 44,000 resolutions at 4,080 shareholder meetings from April 2023 to March 2024. In two thirds (66 per cent) of the meetings, the PPF voted at least once against management, demonstrating its commitment to use its voice for positive change. The PPF’s website now carries full disclosure of its proxy voting behaviour, updated quarterly, giving greater transparency to its stakeholders.
Importantly, the report outlines how the PPF advanced its plans to improve reporting across its portfolio and further enhance its monitoring of ESG factors to safeguard its members financial futures. Having introduced a Transition & Sustainable Assets questionnaire to analyse the progress of its assets in the transition to a Net Zero global economy, it received a 100 per cent response rate from its Infrastructure managers, as well as continuing to support the eFront ® ESG Data Service project to collect Private Markets ESG data throughout the year.
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