This Policy supplements the 91热爆 Pension Scheme’s Statement of Investment Principles and covers the Trustee’s approach to responsible investment and the matters required under Regulations 2(3)(b)(vi)-(vii) and 2(3)(c) of the Occupational Pension Schemes (Investment) Regulations 2005 (the Investment Regulations). The 91热爆 Pension Scheme (the Scheme) has a sole corporate trustee, 91热爆 Pension Trust Limited (the Trustee).
Principles
The Trustee recognises that with ownership comes responsibility and it is committed to exercising its influence and control to promote the long-term sustainability of the Scheme’s investments, consistent with its duty to act in the best financial interests of the Scheme’s members. The approach to promoting the long-term sustainability of the Scheme’s investments is detailed within this policy.
Responsible investment involves effective integration of environmental, social, governance and other relevant factors including climate change (collectively referred to as “ESG” factors) and stewardship (broadly covering voting and engagement) in the Scheme’s investment approach and strategy.
The Trustee seeks to take account of all financially material considerations in consultation with its advisers. Risks and opportunities are assessed for materiality and impact within a broader risk management framework, which takes account of the Trustee’s investment and funding time horizon along with sponsor covenant. The Trustee considers ESG integration (including climate change) and approach to stewardship within the context of this broader risk management framework.
The Trustee is committed to taking appropriate advice on these matters and monitors investment managers’ strategy, decision-making and performance. The Trustee will seek to engage with regulators and public policy-makers, and collaborate with other pension funds and investors in order to achieve the greatest impact and to make the best use of resources.
The Trustee does not have an active policy of soliciting members’ views on non-financial matters. However, the Trustee considers and assesses any member views brought to its attention. The Trustee will not take account of non-financial matters where inconsistent with its legal obligations.
ESG Integration
The Trustee requires the Scheme’s investment managers to take into account ESG factors in their investment processes, including in the selection, retention and realisation of individual securities. Managers’ strategy, decision-making and performance is monitored and reviewed regularly, in accordance with part 5 of the Scheme’s Statement of Investment Principles, to ensure alignment with the Trustee’s policies. The Trustee requests information and relevant policies from its managers to better understand and monitor the approach taken to ESG integration on an ongoing basis. Sustainability credentials are also considered during the manager selection process.
Voting and Engagement
The Trustee believes change is better influenced through ownership and engagement with the companies in which the Scheme is invested. The Trustee does not have a policy of blanket exclusions of particular companies or sectors on either ESG grounds or for non-financial reasons. The Scheme’s investment managers are expected to consider whether particular exclusions are appropriate where they have discretion to sell investments within the terms of their agreements.
For segregated equity and corporate credit mandates, the Trustee has appointed EOS at Federated Hermes to vote at company meetings (where applicable) and to engage with companies on the Scheme’s behalf in relation to ESG considerations and other relevant matters (such as the companies’ performance, strategy, risks, capital structure, and management of conflicts of interest). EOS is expected to exercise votes and carry out engagements in accordance with the Federated Hermes Responsible Ownership Principles and such higher standards as agreed with the Trustee, unless the Trustee believes that doing so would not be in the best financial interests of the Scheme. The aim of these Principles is to contribute to better management of companies and the sustainability of investments over the long term.
For assets held in pooled funds in which the Scheme invests, the Trustee has delegated voting and engagement to the relevant fund managers holding them. EOS and the investment manager concerned may engage on behalf of the Scheme with regard to investee companies in these funds. Managers鈥� voting behaviour, engagement activity and outcomes are monitored and reviewed regularly.
In addition to engagement at the company level, EOS works on the Scheme鈥檚 behalf to engage with public, industry and regulatory bodies in the various markets in which the Scheme invests to promote better practices.
Climate Change
The Trustee recognises that climate change is a long term risk for the fund and has the potential to impact the Scheme鈥檚 investments. In the interests of members and aligned with the goals of the Paris Agreement, the Trustee has committed, consistent with its fiduciary obligations, to managing the investment portfolio in line with achieving net zero greenhouse gas emissions by 2050.
This commitment is based on the expectation that governments and policy makers will seek to deliver on their commitments in the Paris Agreement to limit global warming to well below 2掳C above pre-industrial averages and pursue efforts to limit it to 1.5掳C. The Trustee does not currently plan to use carbon offsets at fund level to achieve this goal.
The Trustee is required to carry out certain governance activities and to report in line with the Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations 2021 (the Climate Regulations鈥�). The Climate Regulations require reporting currently in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and subject to availability of data. Consistent with the Climate Regulations, the Trustee carries out scenario analysis periodically, in order to better understand the Scheme鈥檚 exposure to climate risk.
Affiliations
Information about the Trustee鈥檚 approach to stewardship is available on the Scheme website, including the annual EOS voting and engagement report and quarterly voting disclosures.
The Trustee has signed up to the UN supported Principles for Responsible Investment (PRI). Each year the PRI carries out an assessment of how each of its signatories is performing in implementing the Principles. The Scheme's transparency reports are available on the PRI website.
The Scheme is a signatory to the Paris Aligned Investment Initiative (PAII) Net Zero Asset Owner Commitment and a member of the Institutional Investors Group on Climate Change (IIGCC). The Trustee publishes an annual TCFD report which is available under 'Scheme Documents' of this website.