The Pension Protection Fund (PPF) has published its fourth Responsible Investment Report, reinstating its commitment to sustainability and emphasising how asset owners can have influence through stewardship to drive real world transformation.
The annual report summarises how key stewardship and governance activities carried out by the PPF are contributing towards positive financial, societal and environmental outcomes. This included creating a Climate Watchlist to encourage businesses it invests in to contribute to a fairer, more sustainable future, as well as engaging with almost 700 companies on specific ESG issues and objectives.
Asset owners vote at shareholder meetings to constructively influence how companies operate sustainably, and the report outlines how the PPF voted on over 53,700 resolutions in 4,664 shareholder meetings from April 2022 to March 2023, and in more than two thirds of the meetings voted at least once against management.
Barry Kenneth, Chief Investment Officer at the PPF, said: “Despite a challenging financial backdrop over the last 18 months, we continue to recognise the value of strong stewardship and ESG integration as part of the wider investment process. The focus on understanding long-term material risks and opportunities has continued, with improved data accessibility, reporting and analysis across the portfolio.
“Our team has always firmly believed in understanding our risks, and doing so using evidence-based data. The development of our Climate Watchlist is a huge step forward for us to focus our efforts on our most emitting investments. Having seen the progress this has made in our utilisation of external data, I am excited about what could be possible in future years.”
The PPF, which holds £32.5bn in its portfolio, has also outlined how it’s developed its practices across governance, strategy and policy, risk management, and metrics and reporting to continue its commitment to transparency.
The Responsible Investment report follows the publication in August of the PPF’s third Climate Change report in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). As part of the PPF’s sustainability strategy, which outlines four key goals to embed sustainability across its investment, processes and business decision-making, the PPF has participated in several collective engagement initiatives, including the IIGCC’s new Net Zero Engagement Initiative, the Climate Change Action 100+ initiative, and Find It, Fix It, Prevent It addressing modern slavery within business and their supply chains.
Claire Curtin, Head of ESG and Sustainability, added: “Investing responsibly has always been at the heart of how we manage our investment portfolio. We have built our responsible investment (RI) strategy and stewardship processes in line with the long-term nature of our liabilities and our investment horizon. We embed material ESG considerations right across our investments as well as expecting the same from our external managers.”
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