With regard to the selection and monitoring of third party operators / management: When investing in operational infrastructure, the incumbent management team usually continues to run the asset post investment. As a result, a core part of pre-investment due diligence usually includes an assessment of how well the existing management has been operating the asset: this would include governance and internal controls and the management of environmental, health, safety and social issues. Health and safety in particular is seen as an indicator of the quality of management. 

Post investment, USS will usually hold a board position/s or have other governance rights such as information rights for board papers. Board meetings and reports will typically include health and safety, environmental management and employee related issues as standing agenda items: if these are not present when USS joins the board they will be sought post investment. 

In some instances, monitoring and reporting to regulators on health and safety performance, or management of environmental performance, such as run-off effluent or noise pollution, may form part of the requirements of the concession. The scheme also outlines its expectations to be appraised of any material incidents in real time. A case study of this is provided in INF18.

The scheme enhanced its approach to the on-going monitoring of directly held assets during the year, as outlined in INF01 and in the case studies in INF17.

As USS is a pension fund not an operator of assets, the scheme relies heavily on management teams to deliver day to day running of any asset - including the management of ESG issues.

That said, ESG matters are reviewed by the board of investee assets, on which USS representatives participate as directors. Further, members from investment team, including staff from the Responsible Investment team and Private Markets Group undertake site visits to assets to assess the on-going management of environmental and social issues.