UK - The Pension Protection Fund (PPF) has intensified its focus on environmental, governance and social (ESG) issues, hiring F&C Investments as an adviser and committing to make public its UK voting records.
In addition, the asset manager will provide advice on the PPF's responsible investment strategy which is based on the expectation that companies and governments with sound ESG principles are more likely to offer strong, long term financial performance and stability.
Martin Clarke, director of financial risk at the PPF, said: "These moves will help make sure that we build on our commitment, set out in our investment principles, to take account of ESG considerations when deciding where to invest. We believe that encouraging good practice in this area can reduce market risk and preserve shareholder value over the long term.
"F&C's appointment will help us to address a range of long term, material ESG issues across our assets, starting with UK equities. And, by making our voting records public for the first time, we are demonstrating our commitment to key PPF strategic objectives - being principled and open in our actions."
As well as exercising all the PPF's UK voting rights, F&C will engage companies in its UK portfolio, encouraging them to adopt best practice on a range of relevant issues such as corporate governance arrangements, transparency and reporting and climate change.
George Dallas, director of governance at F&C, said this was a growing area of interest for pension funds. He said: "There is an increasing recognition that the types of issues we are focusing on are relevant, not only in terms of social investing but also with regard to ensuring that the company itself is managing itself appropriately given the sectors that it is in and the risks it is facing.
"I think more investors, more pension funds, are realising this is something that is in their long term interests to consider."
The PPF said it would continue to monitor the extent to which its fund managers address ESG issues, and will look to expand its responsible investment activities to other asset classes over time.
The PPF has signed up to the United Nations Principles for Responsible Investment (UN PRI) which will provide a best practice benchmark on how to address ESG issues across its investments.
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