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Universities Superannuation Scheme - USS

PRI reporting framework 2018

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You are in Direct - Listed Equity Active Ownership » Engagement » Process



LEA 03. Process for identifying and prioritising engagement activities


03.1. 貴社内のスタッフが実行するエンゲージメント活動を特定し、優先順位を決定する正式なプロセスが貴社にあるかどうか示してください。

03.2. 貴社内のスタッフが実行するエンゲージメントを特定し、優先順位を決定する際に使用する基準を説明してください。

03.3. Additional information. [Optional]

USS Investment Management manages the assets of the USS Pension Scheme, so we do not have a diverse institutional client base with a diverse set of investment mandates and associated  ESG requirements to implement.   ESG’s risks differ across different industries so our engagement approach varies from industry to industry.  However, we consider that each industry in which we invest faces material ESG risks of one form or another.

The USS prioritisation framework for engagement was enhanced during the year. A spreadsheet was developed to identify portfolio companies where the scheme's active portfolio holding triggered any of the following criteria:

  • USS a top 20 shareholder
  • USS ownership above 3% issued share capital
  • Company on external collaborative engagement focus lists e.g. Climate Action 100+, Workforce Disclosure Initiative or a human rights watch list
  • Company is a focus of internal engagement with the portfolio managers
  • Company is a significant portfolio over-weight

This framework acts as guide, our approach to identifying engagement priorities is not rigid.  Each individual engagement is considered on its own merits.

We utilise lessons learned from previous ESG controversies in our engagement, both recent and more dated events.  For example Macondo, Rana Plaza and more recently 

Samarco and Wells Fargo are events that all elicited conversations with companies in our portfolio. Following Samarco we asked all the integrated mining companies in our portfolio about their tailings management processes and about what additional measures they had taken post the disaster.

Engagement has also been prompted by NGO research for example the Viscose Report produced by Changing Markets.

Whilst we are aware that corporations in some jurisdictions are more receptive to investor engagement, we are conscious of the need to encourage transparency in markets where investor engagement is less mature.   We vote at all our global holdings and send a letter explaining the rationale behind our votes to all our actively held companies, regardless of their size, index or country of incorporation.

LEA 04. Objectives for engagement activities


04.1. 貴社内のスタッフが実行する貴社のエンゲージメント活動に具体的な目的を定義しているかどうかを記載してください。

04.2. 貴社内のスタッフが実行する貴社のエンゲージメントを受けた企業の行動をエンゲージメント中および後で監視しているかどうかを記載してください。

04.3. 貴社内のスタッフが行うエンゲージメント活動の進捗を監視のうえ評価するために以下のいずれかを実施しているかどうか示してください。


          We maintain a spreadsheet which records engagement activity and objectives.  Current engagements are reviewed in weekly team meetings.

04.4. Additional information. [Optional]

We do not have a formal process in place for monitoring or reviewing progress against engagement objectives, but this is something that naturally happens as part of the engagement process and team meetings.   Thorough preparation is undertaken ahead of every engagement and detailed notes are taken during the meeting with conclusions and next steps.  Meeting notes are shared with fund managers (in many cases they also participate in the meeting) via our internal research system hosted on Bloomberg.    

Some engagement meetings are initiated by the companies in our portfolio, and we welcome this proactive approach.  However for these meetings we would not necessarily have a firm objective. Meetings are also arranged to further our understanding of a company’s business model and the risks they face.  As stewards we need to be comfortable with how our portfolio firms manage risks.  Our PM’s meet with companies on a regular basis to discuss strategy and many cases this naturally involves a discussion of ESG related matters.


LEA 05. Process for identifying and prioritising collaborative engagement


05.1. 協働的なエンゲージメントを特定し、優先順位を決定する正式なプロセスが貴社にあるかどうか示してください。

05.2. 協働的エンゲージメントを特定し、優先順位を決定する際に使用する基準を説明してください。

05.3. Additional information [Optional]

USS has a number of processes in place to identify collaborative engagement opportunities.  We will initiate collaborative engagement where we feel that our actions will be stronger as part of such a collaboration. 

We are active members of a range of organisations which support collaborative engagement:  the PRI, IIGCC,  CA100+ and the Transition Pathway Initiative.  Through these organisations we have engaged on issues such as climate change, palm oil, supply chain management and cyber-crime.   USS is a member of a number of Corporate Governance initiatives that provide a forum to discuss corporate governance issues,  such as the Investor Forum, ACGA, GIGN, ACSI, Corporate Governance Forum, ICGN, UK Pension Fund Forum, Eumedion, PLSA.  We also utilise research and analysis produced by other research bodies and campaign groups, with whom we generally maintain effective and mutually beneficial relationships. 

Please see SG9, SG10 and SG14 for further examples.

LEA 06. Objectives for engagement activities



06.1. 貴社が関与する協働的なエンゲージメントに目的が定義されているかどうか示してください。

06.2. 貴社の協働的なエンゲージメントを受けた企業の行動をエンゲージメント中および後で監視しているかどうかを記載してください。

06.3. 貴社の協働エンゲージメント活動の進捗を監視し、評価するために以下のいずれかを実施しているかどうか示してください。


          All of the above are undertaken informally.

06.4. Additional information. [Optional]

Objectives for collaborative engagements and the associated time frames are normally defined as part of the engagement by the participating investors and therefore we do not have a rigid process for doing this.  However these key factors are discussed internally prior to a decision being made about USS participation.  The level of USS participation will vary based on our exposure to the topic and companies impacted.


LEA 07. Role in engagement process



07.1. サービスプロバイダーがあなたの貴社のために実施するエンゲージメントにおいて、貴社がどのような役割を担っているのか明示してください。

07.2. サービスプロバイダーがあなたの貴社のために実施するエンゲージメントにおいて、貴社がどのような役割を担っているのか明示してください。

07.3. Additional information. [Optional]

As noted, USS has a dedicated responsible investment team that undertakes engagement.  Our internal portfolio managers also conduct regular and comprehensive engagement with companies.  Therefore it is not necessary to use external service providers. The exception to this is the Japanese engagement consortium.  USS works with the Japan Engagement Consortium (JEC) to engage with Japanese companies on our behalf and help overcome language and cultural barriers. The portfolio managers and RI team monitor the engagement conducted by the JEC through regular contacts and reports. USS has quarterly meetings with the JEC to prioritise engagement candidates, set objectives, discuss meeting outcomes and follow up on outcomes for specific companies. We also influence JEC's priorities in discussion with other institutional investors in the collaboration. Views fed back from the JEC have helped to inform our portfolio managers' views of the companies covered. The JEC has also been a strong proponent of the market-level developments in corporate governance in Japan, working with USS to facilitate our engagement with regulatory and industry bodies in Japan. For information on the JEC see

The JEC has engaged on the following issues on behalf of USS in 2017: supply chain management, board independence, remuneration, accountability for resource allocation, board skills, board diversity and succession planning.

LEA 08. Monitor / discuss service provider information

08.1. 貴社に代わりサービスプロバイダーが行ったエンゲージメント活動の成果を監視し、精査しますか?


08.2. 補足情報 [任意]

The Japanese Engagement Consortium (JEC) is the only engagement provider that USS uses.


LEA 09. Share insights from engagements with internal/external managers

09.1. エンゲージメントから得た考察を、貴社内の運用担当者や貴社外の運用会社と共有しているかどうかを記載してください。





09.2. Additional information. [Optional]


USS Active Equity portfolios are managed internally.  As noted, information from engagements and other ESG activities are provided to the investment team via a Bloomberg based data system, including JEC data.  The RI team also systematically discuss ESG issues with the managers directly.  

 A passive portfolio is managed externally and USS overrides the external manager's vote where we have an active position. 

LEA 10. Tracking number of engagements

10.1. 貴社がエンゲージメントの数を追跡しているかどうかを記載してください。




10.2. Additional information. [OPTIONAL]

Whilst records of company meetings are maintained, we do not systematically track the number of engagement meetings, letters or conversations we have with companies or whether the engagement was collaborative or not as we do not consider counting the number of engagements to be a good measure of the quality of engagement.

However, we can estimate for 2017, that USS sent approximately 250 engagement letters to 240 companies. The RI team also held engagement meetings with 40 companies during the year and conducted research on 44 additional companies.

Additionally, RI posted 137 research and meeting notes on the Internal Research Home page on Bloomberg which is available for all our portfolio managers. (We have not sought to count the meeting notes added by the portfolio manager's themselves, which would run into thousands).

USS participates in industry events and collaborative meetings convened by many of the collaborative initiatives listed in SG09 throughout the year.  USS does not only engage with companies in the UK, we engage with companies internationally: 

  • USS participated in collaborative engagement meetings with BHP and Vale regarding the Samarco tailings dam disaster.  
  • In November 2017, a member of RI team spoke at the ACGA's annual conference (at a UBS event) held in Mumbai and participated in a delegation facilitated by ACGA which met with Indian regulators and companies. In May 2017, a member of the RI team chaired a panel at the RI Asia Conference, held in Tokyo, and participated in meetings with companies and regulators.
  • USS also participated in an ACGA study trip to China, where we engaged with companies and regulators on ESG issues. 
  • USS participated in a fact finding trip to Japan to discuss ESG issues with a large Japanese conglomerate operating in the apparel and textile industries.

See other examples in LEA 24.