In-house RI capability - to reduce conflicts of interest and ensure the scheme's long term responsible investment perspective is integrated within decision making, the scheme has developed in-house capabilities for the implementation of the RI strategy. The scheme has an RI Team of six, plus a Sustainability Manager within the Property team. This is one of the largest commitments to responsible investment from a pension fund worldwide.
Commitment to collaboration and addressing market-wide issues - the scheme recognises that collaboration and policy / market level engagement may be more effective to progressing RI than a lone pension fund voice. As a result, since 2000 the scheme has dedicated considerable effort to founding and ensuring the on-going success of collaborative RI initiatives, and addressing systemic impediments to the consideration of ESG issues in investment.
Leadership and innovation - the scheme has often been the first or early adopter of new methods of integrating material ESG matters, where they have a financial bearing. This is demonstrated through, for example, our work on audit, hedge fund governance, enhanced due diligence in the private markets space, early focus on climate change and the establishment of the Enhanced Analytics Initiative
Some highlights for 2017 include:
E and S Voting: USS has sought to systematically integrate an assessment of environmental and social disclosures into its voting decisions for the internal active equity portfolios since 2016. The fund has phased the approach into different global markets and in 2017 extended the coverage to include the US, Canada and Ireland. The scope will further be extended in 2018. Further details are provided in the LEA module.
RI Monitoring of External Managers: Following the launch of USS Investment Builder in December 2016, the scheme has worked to develop its RI due diligence and monitoring processes for the appointment and monitoring of public market managers. Further details of the processes can be found in the SAM section.