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Strathclyde Pension Fund

PRI reporting framework 2017

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You are in Indirect – Manager Selection, Appointment and Monitoring » Outputs and outcomes

Outputs and outcomes

SAM 11. Percentage of externally managed assets managed by PRI signatories

11.1. Indicate approximately what percentage (+/- 5%) of your externally managed assets are managed by PRI signatories.

95 %

11.2. Describe how you ensure that best RI practice is applied to managing your assets

Measures 

          Managers are encourage to join PRI and be active in collaborative engagements
Managers are provided with ESG research by GES and are encouraged to join with GES sponsored collaborative engagements.
Managers must comply with the UK Stewardship Code.

11.3. Additional information. [Optional]

SAM 12. Examples of ESG issues in selection, appointment and monitoring processes

12.1. Provide examples of how ESG issues have been addressed in the manager selection, appointment and/or monitoring process for your organisation during the reporting year.

Topic or issue 
          Shale Oil & Gas and Payday Lending
Conducted by
Asset class
Scope and process

During manager selection exercise is was observed that a particular manager had a heavy bias in its asset allocation and stock selection for oil & gas from fracking and payday lending companies. It was clear during interview that the manager could not see the Fund's concern that this would be an ESG engagment and reporting burden for us as an owner and ultimately in both sectors value could be at risk. The manager did not have the necessary ESG reporting ability nor an clear undertanding of the need for same.
Outcomes

The manager was unable to provide the appropriate guarantees or adjustments to its investment process or reporting and was therefore not appointed
Topic or issue 
          ESG in investment process
Conducted by
Asset class
Scope and process

The Fund appointed an Emerging Market Debt manager in 2016. The Fund had not previously appointed in this asset class and was concerned that our expectations and ESG requirements would be difficult to meet. Managers were required to make detailed disclosures and ESG was a scored feature of the tender in the investment process section.
Outcomes

At interview a considerable amount of time was spent on ESG. The managers integration of ESG in the investment process was explained and its was clear that there was no separation between economic approach and ESG approach. The manager confirmed that they are a PRI signatory

The manager was appointed and ESG was a major factor in this decision. The requirements to comply with the Funds ESG requirements are hardwired through the IMA.

12.2. Additional information.

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