Improving the quality of ESG data
We have used our influence as a large asset owner with an in-house investment team to enhance the quality of ESG data available within global investment markets.
We were one of the founder signatories to the CDP (formerly known as the Carbon Disclosure Project), Institutional Investors Group on Climate Change (IIGCC) and the UN Principles for Responsible Investment (PRI). These initiatives have helped demonstrate market demand for ESG data to support the implementation of responsible investment strategies across asset classes. The PRI provide an international framework for the integration of ESG factors into investment decision-making processes across many asset classes. The latest PRI report can be found here.
- Engagement, voting and stewardship: using our influence as a major institutional investor to promote good material environmental, ethical, social and corporate governance (ESG) practice in our assets and markets. We engage with companies and other assets when it is in the interests of the long-term value of our investments. This may be because an asset is underperforming, is failing to meet best practice ESG standards, or risks impairing its reputation.
We have long practised the principles reflected in the UK Stewardship Code of which we were a founder signatory in 2010. In 2015, we also published the USS Stewardship Principles.
We regularly attend analyst briefings and meet with company executives and non-executive directors on a range of subjects. The topics on which we engage are broad but frequently include corporate governance issues such as succession planning, board composition and oversight and executive compensation, as well as climate related risks, environmental management, labour relations and human rights issues. Engagement relating specifically to ESG matters tends to be conducted by the dedicated responsible investment team.
We will engage collaboratively, take part in joint initiatives, or engage via a consultancy relationship when it is more effective to do so. For example, in Japan, where culture and language can be barriers to engagement, we participate in the Japan Engagement Consortium, a partnership of institutional shareholders which engages with companies to improve long term shareholder returns.
We also engage with external fund managers across all asset classes to review their approaches to responsible investment.
For more information on our voting policy and how we engage with publicly listed companies please refer to our Voting page.
- Engaging with policy makers and regulators of markets in which the fund invests to ensure that the concerns of asset owners and long-term investors are taken into consideration. We seek to influence and address thematic, sector and market related issues that could impact the performance of the fund.
Three important market-wide issues on which we engage are climate change, corporate governance and shareholder rights.