Managers must commit to net zero under People’s new RI policy
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The People’s Pension has a new expectation on fund managers to have a commitment to net zero and “adequate stewardship resourcing”, as part of its new responsible investment policy.
The £26bn master trust has said if these minimum requirements are not met, the trustees will put the manager relationship under review.
“Gone are the days of 'tea and cake' engagement – what we want from our fund managers is evidence of a targeted approach to engagement, routed in a robust theory of change to achieve maximum impact,” said Leanne Clements, head of responsible investment.
“We want to see evidence that limited stewardship resources are being employed in the most effective way possible, and that fund managers execute robust voting escalation strategies,” she added.
Mark Condron, who chairs the trustee board, said the fund wants to drive better outcomes for members: “Hardworking pension savers expect asset owners such as us to ensure that their money is invested responsibly, and this report outlines how we are doing just that. Our approach is to ensure both financial value and resilience of our members’ savings, which is why the requirements we have of fund managers are so robust.”
Under the new policy, the trustee prioritises climate change, nature and human rights.
Fund managers will be expected to support People’s in achieving emissions reduction targets. These are:
• Net zero greenhouse gas emissions by 2050. • Halving GHG emission intensity by 2030 for the scheme’s growth assets. • 30% GHG emissions intensity reduction by 2025 for the developed equity portion of the portfolio.
The document includes new net zero voting guidelines which the master trust expects its fund managers to implement. The guidelines explain when to vote against company directors in fossil fuel-reliant sectors on both the supply and demand side, and on deforestation.
The new policy also includes a commitment to working with industry-wide groups such as Nature Action 100 and Climate Action 100+, as the fund believes these groups are the best way to collaborate with others, improve stewardship and engagement levels, “and most importantly, expects the same commitment of its fund managers”.
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