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North East Scotland Pension Fund

PRI reporting framework 2017

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Overview

LEA 01. Description of approach to engagement

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate whether your organisation has a formal engagement policy.

01.2. Indicate what your engagement policy covers:

01.3. Attach or provide a URL to your engagement policy. [Optional]

01.4. Provide a brief overview of your organization’s approach to engagement

NESPF has a duty to dedicate sufficient time and resource to monitoring the proper application of ESG factors in the approach our external fund managers take to investment and directly in the companies we invest in.

NESPF has a fiduciary duty to incorporate Environmental, Social and Corporate Governance (ESG) factors as an active and embedded principle of risk and return assessment in managing and determining its investment portfolio and ensuring that any managers appointed by the Funds are doing likewise.

Apart from our regular discussions with our Fund Managers our main focus of engagement is through our membership of LAPFF. We have a member on the Executive and we attend all business meetings.

Through our involvement with the PRI, the Fund has a representative on the Sustainable Stock Exchanges Initiative Working Group and we have directly engaged with our own Fund Managers to encourage them to join. We have recently become directly involved with engaging directly with a couple of Stock Exchanges.

01.5. Additional information [optional]


LEA 02. Reasoning for interaction on ESG issues

02.1. Indicate the method of engagement, giving reasons for the interaction.

Type of engagement

Reason for interaction

Individual/Internal staff engagements

Collaborative engagements

Service provider engagements

02.2. Additional information. [Optional]

As an active and responsible investor North East Scotland Pension Fund believes that engagement is a major factor which should, where relevant, be taken into account when managing the Fund's assets. The concept of Long Term Responsible Investment (LTRI) and consideration of Environmental, Social and Governance (ESG) issues in our investment are fundamental to the Fund.

Our Fund does not have the resources to engage with companies in-house, we conduct all our engagement through collaborative engagement networks. We are active members of the Local Authority Pension Fund Forum which has more than 20 years of experience engaging with companies on matters of corporate governance and corporate social responsibility.

We attend all business meetings and annual conference. LAPFF’s engagement approach is based on the following core principles:

• Company engagement is conducted on the basis of reputational; risk and long-term value for shareholders. The Forum does not generally take an ethical stance on issues

• Engagement should seek to improve the performance of laggard companies while also striving to acknowledge and encourage companies that are leaders.

•The Forum seeks to understand the company perspective on controversial issues before suggesting opportunities to improve governance or corporate responsibility practices

• All engagement meeting notes and company correspondence are kept strictly confidential in order to protect the company’s reputation and allow for open and honest dialogue.

• In the interest of transparency and stewardship, the Forum reports on its engagement activities quarterly. Quarterly reporting is general in nature and does not reveal confidential information. Our Fund has also signed up to various UNPRI initiatives, Global Investor Statement on Climate Change, Global Investor Statement on the Arms Trade and are a member of the Sustainable Stock Exchanges Investor Working Group.


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