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TPT Retirement Solutions

PRI reporting framework 2019

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

Appointment

SAM 04. Appointment processes (listed equity/fixed income)

04.1. Indicate if in the majority of cases and where the structure of the product allows, your organisation does any of the following as part of the manager appointment and/or commitment process

04.2. Provide an example per asset class of your benchmarks, objectives, incentives/controls and reporting requirements that would typically be included in your managers’ appointment.

Asset class

Benchmark

ESG Objectives

          To the best of its ability, the manager shall avoid investing in:
-	any company involved in the manufacture of controversial weapons; 
-	any company which derives more than 10% of its revenues from manufacturing whole weapons systems or strategic parts; 
-	any company involved in the cultivation of tobacco and/or manufacture of tobacco-related products; 
-	any company which derives more than 10% of its revenues from the distribution, sale or marketing of tobacco and/or tobacco-related products; 
-	any company which derives more than 10% of its revenues from adult entertainment; 
-	any company which derives more than 10% of its revenues from the production or distribution of alcohol; 
-	any company that derives more than 10% of its revenues from the production and distribution of adult entertainment/pornography.
-	Nestlé S.A. or any of its affiliated companies; and 
-	any company which derives more than 25% of its revenues from the mining of coal or coal servicing
The manager shall refer to the Trustee’s Policy for Ethical Investments and the Trustee for guidance on the above ethical investment restrictions.
        
          From manager appointment - To the best of the its ability, the manager shall:
•	research, analyse and incorporate material environmental, social and governance (“ESG”) factors into the equity research process; 
•       explicitly consider how climate change regulation and the transition towards a low carbon economy might impact the longer-term risk and return of investments. In particular, The manager shall demonstrate to the Client how it has applied the Client’s policy on climate change when making investments to high carbon sectors. The manager should refer to the following FTSE / Dow Jones industry classification benchmark (ICB) sectors which the Client considers to be most energy and/or carbon intensive for this purpose:
 - aluminium; 
 - building materials & fixtures; 
 - coal; conventional electricity;
 - general mining; 
 - integrated oil & gas;
 - iron & steel; and 
 - multi-utilities; and 

•	continue to monitor material ESG performance of companies invested in the fund and, in the event of poor performance, seek to engage with the relevant management.
        
          From IMA of asset manager appointed. The manager shall continue to monitor material ESG performance of companies invested in the fund and, in the event of poor performance, seek to engage with the relevant management.
        

Incentives and controls

Reporting requirements

Benchmark

          iBoxx £ Corporate and Collateralised
        

ESG Objectives

          Please see approach for equities.  The wording in the IMA would be similar for corporate bonds.
        
          Please see approach for equities.  The wording in the IMA would be similar for corporate bonds.
        

Incentives and controls

Reporting requirements

Benchmark

          iBoxx £ Corporate and Collateralised
        

ESG Objectives

          Please see approach for equities.  The wording in the IMA would be similar for corporate bonds.
        
          Please see approach for equities.  The wording in the IMA would be similar for corporate bonds.
        

Incentives and controls

Reporting requirements

Benchmark

          IPD Quarterly Universe
        

ESG Objectives

          The manager may not invest in properties that do not meet certain standards, for example in TPT's direct property fund, the manager may not invest in assets that have an Energy Performance Certificate (EPC) rating lower than a D without providing TPT with a strategy for raising the EPC to meet regulatory requirements.
        
          The manager is required to demonstrate how ESG, including physical risks is integrated into the due diligence and valuation of properties for the fund.
        
          We recognise that the manager has limited control over how shops are fitted out. Therefore it is up to the manager to promote the benefits of RI to the underlying tenant in order to improve the EPC standard.
        

Incentives and controls

Reporting requirements

Benchmark

          Internal Rate of Return
        

ESG Objectives

          The fund has ESG investment restrictions written into the IMA which prevent it investing in any assets that would breach TPT's Policy for Ethical Investments.
        
          Review of the ESG framework used to develop and manage the assets in the portfolio.
        
          The manager is expected to demonstrate ESG plans for the assets in the portfolio that will deliver ESG improvements over time in order to protect the long-term value of the asset. This may take the form of CO2 emissions, social impact of addressing energy transition.
        

Incentives and controls

Reporting requirements

04.3. Indicate which of these actions your organisation might take if any of the requirements are not met

04.4. Provide additional information relevant to your organisation's appointment processes of external managers. [OPTIONAL]

          Although failure to comply with TPT's policies would not automatically lead to a termination of the mandate in question, it would inform TPT's overall view of a manager's suitability to manage a mandate on behalf of TPT which would be reflected in their overall and RI ratings.
        

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