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Universities Superannuation Scheme - USS

PRI reporting framework 2018

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ESG issues in asset allocation

SG 13. ESG issues in strategic asset allocation

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

13.1. Indicate if your organisation executes scenario analysis and/or modelling in which the risk profile of future ESG trends at portfolio level is calculated.

Is this scenario analysis based on a 2°C or lower scenario?

SG 13.1a CC. Pleased describe the resilience of your organisation’s strategy, considering different future climate scenarios.

Strategy affected
Changes to strategy
Description of scenario and time-horizon
How analysis has been used
          Public equities
        
          exposures highlighted
        
          USS participated in a WWF led project to assess the alignment of the scheme’s public equity holdings to the 2°C climate scenario developed by the International Energy Agency (IEA).  Using the 2° Investing Initiative  methodology, which was developed by the Sustainable Energy Investment (SEI) research consortium, the project assessed the alignment to a portfolios’ power production, the auto sector and fossil fuel production investments against the IEA 2°C scenarios for 2020.  This project used asset-level data to create scenario analysis for each participating investor’s equity portfolio.  The focus on sectors likely to be most impacted by policy changes to address climate change risk – and opportunity in the case for renewables and electric vehicles.
        
          The outcome of this analysis highlighted that whilst the USS equity portfolio was aligned with the 2°C scenario for the power sector, the scheme was not aligned for autos or fossil fuels (probably resulting from the benchmarks chosen, as USS tends to be more exposed to its home market which is more carbon intensive than the MSCI world).  The analysis undertaken for this project was limited but we believe it will evolve, and we may participate again in the future.
        

13.2. Indicate if your organisation considers ESG issues in strategic asset allocation and/or allocation of assets between sectors or geographic markets.

We do the following

13.3. Additional information. [OPTIONAL]

USS has taken an integrated approach to ESG matters, with environmental, social and governance factors considered in analysis for stocks, market level and asset class allocations. Where appropriate scenario analysis will be used to develop the investment thesis for both public and private market investments.

For example, the Investment Committee away day in 2017 considered research including scenarios on the global adoption of electric vehicles in a paper entitled 'Beyond Carbon'. The paper considered geo-political scenarios that could impact on battery production, and 'peak oil' scenarios. They also reviewed scenario analyses on disruption in energy utilities which integrate growing socio-political issues on consumer fairness and energy security. A third area considered the impact of China on the global economy where ESG considerations (such as the drive against bribery and corruption, Chinese corporate governance and environmental concerns) are built in to analysts' bull and bear investment cases.

At a stock level, climate change scenario analysis was used in the review of one of USS's power generation companies which was a heavy user of coal. The climate change scenario analysis contributed to the portfolio manager's decision to divest from the holding.


SG 14. Long term investment risks and opportunity

14.1. Describe the process used to identify short, medium and long-term risks and opportunities that could have a material impact on your organisation and its activities.

The trustee’s ultimate objective, which underscores its investment approach, is to provide secure pensions for the scheme’s members. The trustee's Investment Committee and USS Investment Management Board and executives in particular, consider investment risks and opportunities.  Further details on USS's investment approach and the management of investment risks are outlined on the scheme's website here https://www.uss.co.uk/how-uss-invests/investment-approach and https://www.uss.co.uk/how-uss-invests/investment-approach/managing-investment-risk.  Responsible investment underpins the approach.

 

ESG issues represent potentially significant risks for the assets in which we invest.  These risks can be

  • Physical – a changing climate may directly impact the viability of some assets or business models (for example, flood risk for real estate, or drought / fire risk for timberland assets);
  • Regulatory – where governments set in place polices to reduce emissions or encourage changes in technology in the shift to a lower carbon future.  This could lead to, for example, the stranding of coal assets; 
  • Reputationally – where members and beneficiaries express concerns regarding investments in certain sectors or companies, for example fossil fuel investments 

14.1 CC. Describe the processes used to determine which climate-related short, medium and long-term risks and opportunities could have a material impact on your organisation and its activities.

See answer to SG14.1

Climate change is an issue of global significance; the scientific consensus is that man-made emissions of carbon dioxide and other greenhouse gases are contributing to changes in the atmosphere that will cause significant changes in global temperatures.  While there are uncertainties around the specific impacts, the predicted changes (e.g. rising sea levels, flooding, droughts) pose a threat to environmental, social and political stability, and to the businesses and other assets in which USS invests. 

As changes in the climate could have major effects on both the economy and the quality of life of our members, issues related to climate change are legitimate concerns of pension fund trustees.  The policy response to a changing climate, including the Paris Agreement and the targets set for reducing emissions, also present both risks and opportunities to long term investors like USS.  

 

14.2. Some investment risks and opportunities arise as a result of long term trends. Indicate which of the following you act on.

14.2a cc. Please describe how you define “short”, “medium” and “long term”, and describe your material climate-related issues over these time horizons.

Definition
Description of material climate-related issues
Short term
          1 year
        
          stock price movements resulting from increased regulation to address climate change
        
Medium term
          5 years
        
          regulation and other factors leading to changes in consumer behaviour and therefore purchasing decisions – an example of this would be the significant uptake in electric vehicles
        
Long term
          greater than 5 years
        
          Adaptation risk, where changes to the climate mean that there are potential impacts to assets that USS owns.  Examples would include increased flood risk to real estate assets as a result of severe weather events, or drought raising the fire risk associated with timberland investments
        

14.3. Indicate which of the following activities you have undertaken to respond to climate change risk and opportunity

14.4. Indicate which of the following tools you use to manage emissions risks and opportunities

14.4a CC. Please provide further details on these key metric(s) used to assess climate related risks and opportunities.

Metric Type
Coverage
Purpose
Metric Unit
Metric Methodology
Metric Trend
Limitations / Weaknesses
Climate-related targets
          property
        
          management of energy / emissions
        
          %
        
          direct measurement of energy use.
        
          downwards
        
          
        
Weighted average carbon intensity
          
        
          
        
          
        
          
        
          
        
          
        
Carbon footprint (scope 1 and 2)
          
        
          
        
          
        
          
        
          
        
          
        
Portfolio carbon footprint
          
        
          
        
          
        
          
        
          
        
          
        
Total carbon emissions
          
        
          
        
          
        
          
        
          
        
          
        
Carbon intensity
          
        
          
        
          
        
          
        
          
        
          
        

14.4b CC. Please describe in further detail your key targets.

Target type
Time Frame
Base Year
KPI
Target Methodology
Limitations / Weaknesses
Attachments
          10 years
        
          2010
        
          Energy reduction
        
          USS has a long term property portfolio target of 30% reduction between 2010/11 and 2019/20. We also have individual building targets for directly held properties.
        
          
        
          
        
          
        
          
        
          
        
          
        

14.5. If you selected disclosure on emissions risks, list any specific climate related disclosure tools or frameworks that you used.

As part of our ESG integration our portfolio managers (across a number of asset classes), conduct analysis of carbon risk (including regulatory risk) where this is material to the investment case.  We utilise investment research that incorporates scenario analysis pertaining to carbon risks.  We use a number of different tools for assessing emissions risk; Bloomberg's Carbon Footprinting Tool, MSCI Carbon Data and screening tools and Trucost's Carbon Reporting Service.

Carbon footprinting

USS has a long standing commitment to carbon footprinting, which we have been undertaking since 2009 for our public equity portfolio.  From these footprints we have sought to factor climate change considerations into our investment decisions where it has a financial bearing.

Initially the carbon footprinting exercise was undertaken using an external specialist data analysis firm.  The scheme then started to undertake internal carbon footprints as this enabled us to have a more timely assessment of individual portfolios exposure to carbon.  In our latest footprinting, we have attempted to assess the carbon exposures across all asset classes.  Given the complexity of this, we have once again started to use the services of a specialist in this area. 

For each public equity portfolio, the carbon footprinting enabled the identification of the top 10 assets responsible for contributing to the carbon footprint of that portfolio.  This information was communicated to individual portfolio managers and analysts to ensure that they are aware of where their greatest exposures lie.  These data can be used for:

  • Enhanced engagement
  • Improved integration of carbon data in investment models. 

USS’s public equity portfolio has consistently had a lower carbon footprint than its benchmark:  as a predominantly actively managed portfolio, USS’s internal investment team can choose which companies in which to invest.  This enables them to incorporate ESG issues, including climate related factors, into their decisions.  As previously noted, we publish our pubic equity carbon footprint as part of our commitment to the Montreal Pledge. The detailed results of this exercise were presented to individual portfolio managers and the trustees of the scheme. See https://www.uss.co.uk/~/media/document-libraries/uss/investments/riactivities/carbonfootprintmontrealpledge.pdf?la=en 

The scheme is unusual in that it has undertaken carbon footprinting across a number of assets (including fixed income, direct assets and hedge funds).  We do not believe it appropriate to publish these footprint data at the present time for a number of reasons including the following:

  • The methodologies for a number of asset classes are nascent and therefore it seems premature to publish footprint data based on methodologies which will change.
  • Carbon data itself is lacking for some asset classes – for example private equity. 
  • Whilst we collect data on energy use for our direct real estate assets, we do not collect tenant data.  As a result, the footprints do not necessarily give a meaningful analysis. 

To stimulate debate on and development of carbon footprinting methodologies, USS participated in a video interview with Trucost / S&P Dow Jones Indices to discuss the approach USS have taken to measure carbon footprinting across all asset classes (not just public equities), and some of the challenges we encountered when we tried to do this.  This can be viewed here:  https://www.uss.co.uk/how-uss-is-run/views-from-uss/carbon-footprinting.  

USS also participated in discussions on the issues facing carbon footprinting with a group of other asset owners.  A report of these discussions, “If carbon footprinting is the answer, then what is the question?”, which was published to help move forward the development of cross asset class footprinting, is available here: 

https://www.responsible-investor.com/home/article/carbon_footprint_piece/P0/. 

The Transition Pathway Initiate (TPI)

USS Investment Management helped develop and launch (in January 2017) the Transition Pathway Initiate (TPI).  Partnering with other global pension funds, FTSE and the Grantham Institute (part of London School of Economics) this project tracks companies’ implementation of policies and practices that manage a shift to a 2 degree world.  The results of the assessments are freely available to other investors - see http://www.lse.ac.uk/GranthamInstitute/tpi/ - and can be used in both stewardship activities and to enable USS Investment Management’s fund managers to have an understanding as to where companies are in their transition.

The TPI assesses how companies are preparing for the transition to a low-carbon economy in two ways:

  • Evaluates and tracks the quality of companies’ management of their greenhouse gas emissions and of risks and opportunities related to the low-carbon transition.
  • Evaluates how companies’ future carbon performance would compare to the international targets and national pledges made as part of the Paris Agreement.

The TPI has thus far released reports on oil and gas, mining, utility, steel and cement sectors (all high carbon), with the results of these assessments being published through an online tool – see http://www.lse.ac.uk/GranthamInstitute/tpi/.  The TPI analysis of company climate change management is likely to be used in the CA 100+ project (details below).  

Other activities 

USS has also written to heavy carbon emitting companies in our listed equity portfolio.  We asked these companies to explain what action they had taken in response to the Paris Agreement and what scenario analysis was undertaken.  We encouraged firms to go public with this disclosure. The responses received helped to inform our engagement activities.

USS is a participant in GRESB and GRESB Infrastructure and we expect our externally appointed real estate investment managers and direct infrastructure assets to participate.  

USS continues to hold a position as advisor to the IIGCC board.  The IIGCC provides a forum for investors to agree common and consistent expectations on disclosure on the management of climate change risk and a conduit for the communication of these expectations to investee companies.  We consider that the IIGCC has made an invaluable contribution to improving disclosure on climate change risk through these activities. See http://www.iigcc.org/.

For additional information on the scheme's approach to climate change and activities in this area see: https://www.uss.co.uk/how-uss-invests/responsible-investment/activities/climate-change.

14.6. Additional information [Optional]

 

 

14.7 CC. Describe your risk management processes for identifying, assessing, and managing climate-related risks.

Please describe

USS has the advantage of in-house expertise in fund management and responsible investment, which work in tandem to ensure that the scheme suitably assesses and manages the risks posed by a changing climate and the policy response to it.  Asset managers take responsibility for identifying and managing all risks associated with their investments, and this includes climate change.  USS Investment Management’s RI team and property sustainability manager both work with the managers to help ensure that climate risks are being assessed and addressed, and work more broadly across the fund and externally on the issue. 

Carbon Footprint

The scheme has for a number of years been calculating the carbon footprint of its internally managed public equity investments.  In addition to being able to estimate a total footprint for public equities against the benchmark, the footprint also enables us to identify and analyse the most carbon intensive companies in each equity portfolio, helping to inform our engagement and voting activity and allowing carbon risk to be integrated into our investment analysis. The scheme has engaged with companies where there are concerns.  The outcomes of this process are published on the USS website as part of its commitment to the Montreal Pledge.  Every time the scheme has undertaken carbon footprinting its public equity portfolio has been underweight that is less carbon intensive than its benchmarks.  For details of the overall footprint of the scheme’s public equity portfolios when last assessed, please see  https://www.uss.co.uk/~/media/document-libraries/uss/investments/riactivities/carbonfootprintmontrealpledge.pdf

USS use of carbon footprint data

The most carbon intensive companies in the portfolio can be compared to their peer group to identify if any of USS’s holdings are outliers in terms of carbon intensity. The footprinting data provided to each of the equity desks has included their overall footprint vs individual benchmark, and the top ten assets which contribute to this exposure. An additional benefit of this process is that it allows us to identify these companies and engage with them if they operate in a carbon intensive industry and we think they should be reporting. This is in addition to the support USS has been giving to the  (CDP) since its inception in 2000.

Property

USS is largely a direct property investor, owning a number of office, retail and industrial buildings across the UK.  The fund has detailed processes in place to assess energy costs, flood risk, and other climate / environmental considerations in the acquisition of assets.  Energy use is important as buildings in the UK have to increasingly achieve specific standards of energy efficiency to achieve specified levels of certification. 

A changing climate is also predicted to impact the severity and frequency of storms in the UK, and this could increase flood risk to the property assets which USS owns.  USS takes this risk very seriously and considers the potential impacts of flooding within the insurance and commercial due diligence processes for property assets.   

Global Real Estate Sustainability Benchmark (GRESB)

The fund was also one of the three founding investors of the Global Real Estate Sustainability Benchmark. Now supported by a large number of pension funds and other investors, GRESB is an online system enabling the benchmarking of the sustainability activities of property fund managers. There is a significant focus on climate change and energy related activities within the GRESB survey. Please see the following web site for more information on GRESB: https://gresb.com/gresb-real-estate/.   USS has a small number of external property fund managers which are actively encouraged to complete the GRESB assessment. The fund has also actively questioned these funds on their management of climate related risks and carbon / energy management.

Private Assets

Due diligence on private assets (including PE, direct investments and infrastructure) includes questions on climate change management and resilience of assets if that is appropriate. Examples of such questions include the following: 

  • Assessing the risks associated with a rising sea level at a sea port investment;
  • Implication of State vs Federal climate policy for a gas plant in the USA.
  • Asking private equity managers how they monitor climate change related issues in their portfolios, both in their due diligence, and in their subsequent management of assets. 

With directly held assets, where USS has either full or partial ownership, the scheme has good oversight of and access to energy, carbon and other climate related data.  With private equity funds, where USS is one step removed from the underlying assets as a result of the LP : GP relationship, the data are more difficult to obtain.  USS plans to work with other pension funds to encourage improved monitoring and disclosure of climate change related risks and data by the private equity sector. 

USS is also a member of GRESB Infrastructure: The GRESB Infrastructure Asset Assessment provides the basis for systematic reporting, objective scoring and peer benchmarking of ESG management and performance of infrastructure assets around the world.  As with the real estate assessments, there is a significant focus on how infrastructure assets manage their energy and therefore carbon emissions, as well as other aspects of climate change risk. 

14.8 CC. Describe your processes for prioritising climate-related risks.

As is typical for USS’s management of responsible investment issues, we prioritise in a range of different ways and focus on a range of different areas.

  • Over the years we have prioritised public policy level engagement on climate change as we feel that getting appropriate policy and regulation in place is the critical first step in addressing this long-term risk.
  • We will also prioritise specific data provision and engagements for our actively held public equity companies. This kind of prioritisation has been guided in the past by our carbon footprinting exercises, which identify which companies and sectors may have the highest exposure to climate change or carbon risk.  We believe that this is one of the most effective uses of carbon footprinting, i.e. helping identify where specific risks may lie in a portfolio.
  • The RI team will also work with active managers where they have a specific request for data and opinions on a company or asset associated with its exposure to a change in climate or to policies addressing climate change (for example, a cost of carbon). 

Integration of climate change related issues into investment decision making processes

As noted, climate change and the policy response to it, have the potential to impact the value of the investments USS makes across asset classes.  As a result, our fund managers include, for example, assessments of physical climate change in the due diligence of real assets, and our equity managers will build carbon costs into their assessments of company valuations.

USS internal fund managers integrate climate related risks into their investment processes where these are material, particularly policy related risks such as cost of carbon. For example, at a stock level, scenario analysis has been used to assess the risks associated with potentials costs of carbon.  An example is where a Japanese utility’s emissions were assessed with a price on carbon, even though it was operating in a market where there is no current (or expected in the near future) price on carbon.  The portfolio manager applied a scenario with a $10 cost per tonne of carbon into their modelling of the company’s future returns to assess the sensitivities to such change. 

To help its fund managers understand a specific climate related risk, USS hosted an International Energy Authority meeting for the with internal asset managers to discuss the organisations’ views on stranded assets.  The fund has also held meetings with sell-side analysts to understand better the issues associated with stranded assets, the likely exposure of certain corporate sectors, and the implications for the fund. 

 

14.9 CC. Do you conduct engagement activity with investee companies to encourage better disclosure and practices around climate-related risks?

Please describe

Engaging with companies to encourage better management of climate risk.

We regularly discuss climate change at meetings with companies, as part of our ongoing engagement. Targets of such engagement include major companies in the oil and gas and mining sectors. This includes encouraging disclosure of carbon emissions and information on how companies/assets are managing climate risks. For example, we have in the past voted in favour of resolutions at fossil fuel companies (e.g., BP and Royal Dutch Shell) requiring those companies to provide detailed annual reporting on carbon and climate change from 2016, or their support for industry bodies which lobby against climate change action. 

USS is an active owner of the assets in which it invests, regularly meeting with corporate executives and boards of companies.  The scheme has been engaging on climate related issues since 2001, and will engage in collaboration with other investors where this is likely to be more effective in encouraging change. 

As a recent example, a member of the RI team, in conjunction with another large European investor and our service provider (Japan Engagement Consortium), held a meeting with a Japanese electric utility in Tokyo.  This utility which has significant coal powered generation capacity, had been highlighted by our carbon footprinting process as a significant carbon source in our portfolio.  The meeting was to discuss how the company was going to manage its exposure to climate change risk in a world facing a carbon transition.  Issues discussed included alignment with Japans NDCs, renewables and nuclear power.  We were informed that this was the first time the company had held a meeting in their office specifically to discuss ESG issues. 

Other companies where USS has engaged on climate relate issues include the following: 

  • Shell
  • BHP Billiton
  • BP plc
  • Cemex
  • Glencore
  • Honda
  • Rio Tinto
  • Exxon,
  • Heidelberg cement
  • International Airlines Group. 

USS also uses its voting power at company AGMs to support climate change related resolutions.  We have a history of supporting such resolutions going back almost 20 years, with a particular focus on corporate disclosure.  Whilst we support most climate related resolutions, we are discerning and will only support those which make sense for the company and USS as long term investors.  We have also co-filed shareholder resolutions requesting that companies disclose their plans for aligning with a transition to a 2°C world. 

The scheme has also developed a more systematic way of integrating environmental and social issues into its voting process.  This approach is based on company disclosure, the premise being that if investors are to integrate environmental and social considerations into their investment decision making processes, it is essential that companies disclose the requisite information about their performance on these important issues.   This proactive stance includes the assessment of disclosure of carbon data.  Such proactive voting is rare amongst investors, as most simply vote on the proxy issues presented.  It is hoped that by making it clear that these are important issues for investors, these actions will drive improved transparency on climate change and other ESG issues by companies.  It is also hoped that this approach will facilitate a more integrated approach to corporate reporting, and the integration of E / S considerations into remuneration policies.  

Engaging with policy makers to ensure appropriate climate change policies are established to encourage the transition to a low carbon economy.

Most of our engagement with policy makers on climate change is conducted through the Institutional Investors Group on Climate Change (IIGCC). Over the years, USS has met with policy makers from governments from across the EU, the European Commission itself, the UK government and also representatives from the Australian government and the Province of Alberta (the home of oil sands).

14.10 CC. Describe how you use data from climate-related disclosures.

These data are used to both inform investment decision making, and to aid in the stewardship activities of the fund.  


SG 15. Allocation of assets to environmental and social themed areas

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

15.1. Indicate if your organisation allocates assets to, or manages, funds based on specific environmental and social themed areas.

15.2. Indicate the percentage of your total AUM invested in environmental and social themed areas.

1 %

15.3. Specify which thematic area(s) you invest in, indicate the percentage of your AUM in the particular asset class and provide a brief description.

Area

Asset class invested

1 % of AUM

Brief description and measures of investment

USS has in excess of £700m in committed financing to UK renewables.

Investments include L1 Renewables which is USS's wholly owned renewable lending platform established by USS in 2014 supporting UK onshore wind projects and project finance loans to operational wind farms. See http://l1renewables.co.uk/. 

Additionally USS owns direct equity interests in a number of offshore wind farms sold by the UK government of the Green Investment Bank.  

Note - USS does not have specific target allocations to specific environmental or social themed assets and we have not calculated the percentage figure for AUM (hence reporting 1% for all the entries). All the investments outlined in SG15.3 have been made by USS Investment Management based on the attractiveness of the risk adjusted returns consistent with our fiduciary duties. 

Asset class invested

1 % of AUM

Brief description and measures of investment

The Whiteley Shopping Centre which was constructed by USS, achieved a BREEAM Excellent sustainability rating becoming the first UK shopping centre to achieve the standard. See:

https://www.whiteleyshopping.co.uk/community/whiteley-green.

Note - USS does not have specific target allocations to specific environmental or social themed assets and we have not calculated the percentage figure for AUM (hence reporting 1% for all the entries). All the investments outlined in SG15.3 have been made by USS Investment Management based on the attractiveness of the risk adjusted returns consistent with our fiduciary duties. 

Asset class invested

1 % of AUM

Brief description and measures of investment

The scheme has c. £360 million invested in ASA and/or FSC certified timberland in Australia and the US. 

Note - USS does not have specific target allocations to specific environmental or social themed assets and we have not calculated the percentage figure for AUM (hence reporting 1% for all the entries). All the investments outlined in SG15.3 have been made by USS Investment Management based on the attractiveness of the risk adjusted returns consistent with our fiduciary duties. 

Asset class invested

1 % of AUM

Brief description and measures of investment

USS invests in banks and financial institutions in developed and emerging markets. Whilst we have not sought to measure their impacts and contributions to SME financing, many of the institutions will have an allocation to SME finance. See for example, Standard Chartered's sustainability website - https://www.sc.com/en/sustainability/.

Note - USS does not have specific target allocations to specific environmental or social themed assets and we have not calculated the percentage figure for AUM (hence reporting 1% for all the entries). All the investments outlined in SG15.3 have been made by USS Investment Management based on the attractiveness of the risk adjusted returns consistent with our fiduciary duties. 

Asset class invested

1 % of AUM

Brief description and measures of investment

USS launched the Supported Housing Investment Limited Partnership (SHIP) in 2016 in a joint venture with Morgan Sindall Investments Limited.

SHIP will deliver over 500 new purpose-built supported independent living apartments across the UK. The housing will cater for vulnerable people with physical and learning disabilities, enabling them to live as independently as possible. See https://www.uss.co.uk/news/all-news/2017/01/uss-and-morgan-sindall-investments-launch-new-supported-living-fund for further details.

Note - USS does not have specific target allocations to specific environmental or social themed assets and we have not calculated the percentage figure for AUM (hence reporting 1% for all the entries). All the investments outlined in SG15.3 have been made by USS Investment Management based on the attractiveness of the risk adjusted returns consistent with our fiduciary duties. 

Asset class invested

1 % of AUM

Brief description and measures of investment

The scheme holds emerging market education focussed assets in its private equity portfolios.  

Note - USS does not have specific target allocations to specific environmental or social themed assets and we have not calculated the percentage figure for AUM (hence reporting 1% for all the entries). All the investments outlined in SG15.3 have been made by USS Investment Management based on the attractiveness of the risk adjusted returns consistent with our fiduciary duties. 

Asset class invested

1 % of AUM

Brief description and measures of investment

USS has investments in private equity and listed equity which have a focus on healthcare, including companies which are focusing on the development of healthcare infrastructure in developed and emerging markets. The scheme is also invested in companies working in areas such as occupational health, biotech, diagnostic care and equipment.

Note - USS does not have specific target allocations to specific environmental or social themed assets and we have not calculated the percentage figure for AUM (hence reporting 1% for all the entries). All the investments outlined in SG15.3 have been made by USS Investment Management based on the attractiveness of the risk adjusted returns consistent with our fiduciary duties. 

Asset class invested

1 % of AUM

Brief description and measures of investment

USS holds significant direct investments in UK water company debt, as well as listed bonds and equity in private and listed water utilities. We also hold investments in designers and manufacturers of water infrastructure equipment across the full water-cycle including water pumps, treatment, testing and metering equipment. Such investments support water companies to provide clean, safe, potable water and waste water treatment to protect waterways and seas. 

For example see  

  • https://www.uss.co.uk/news/all-news/2018/03/uss-completes-investment-in-yorkshire and
  • https://www.uss.co.uk/how-uss-invests/the-fund/investments/private-markets/private-credit/yorkshire-water-case-study.

Note - USS does not have target specific allocations to specific environmental or social themed assets and we have not calculated the percentage figure for AUM (hence reporting 1% for all the entries). All the investments outlined in SG15.3 have been made by USS Investment Management based on the attractiveness of the risk adjusted returns consistent with our fiduciary duties. 

          Public transport
        

Asset class invested

1 % of AUM
1 % of AUM

Brief description and measures of investment

USS is invested in Globalvia, an international toll road concession company.  https://www.uss.co.uk/news/all-news/2014/03/uss-commits-150m-to-globalvia

The scheme is also invested in Heathrow, an international hub airport. See https://www.uss.co.uk/how-uss-invests/the-fund/investments/private-markets/real-assets/heathrow-case-study.

Note - USS does not have specific target allocations to specific environmental or social themed assets and we have not calculated the percentage figure for AUM (hence reporting 1% for all the entries). All the investments outlined in SG15.3 have been made by USS Investment Management based on the attractiveness of the risk adjusted returns consistent with our fiduciary duties. 


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