The Pension Protection Fund (PPF) has aligned its policies and tools with the more ambitious 1.5°C climate scenario in the past year, as part of a major drive on environmental, social and governance (ESG) issues.
Its 2021/22 Responsible Investment Report reveals that the PPF introduced voting guidelines for listed equity holdings on climate change and modern slavery, as well as diversity and inclusion.
The statutory body, which holds £39bn in its portfolio, split evenly between internal and external investment teams, has also influenced companies to change by engaging with 196 firms on ESG issues and voting at almost 5,000 meetings this year, including opposing at least one management resolution at 67% of meetings. Some 45% of its engagement objectives progressed by at least one milestone during the year.
The organisation carried out a net-zero project across its complete portfolio to assess its alignment with the Paris Agreement and identify “highest-priority engagement targets”, while employing a new equity benchmark to drive a significant reduction in the carbon exposure of its investments. PPF also started requiring regular ESG metrics from investment managers.
The body’s head of ESG, Claire Curtin ,said it is “still learning on our exciting ESG journey as we adapt to a changing world” and hoped that its report “provides an opportunity to share our insights and knowledge with the wider industry so that we can continue learning from each other”.