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CCLA

PRI reporting framework 2019

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Objectives and strategies

SG 05. RI goals and objectives

05.1. Indicate if and how frequently your organisation sets and reviews objectives for its responsible investment activities.

05.2. Additional information. [Optional]

CCLA's bi-annual Ethical and Responsible Investment Committee is responsible for setting policy and monitoring the implementation of our Responsible Investment approach.

Due to the importance that we place upon the Committee it is Chaired by our Chief Executive and is attended by the Chief Investment Officer, the Head of Responsible Investment and other relevant members of staff. Decisions made by the Committee are binding upon all areas of our investment approach.

The standing agenda for the Committee includes, but is not limited to:

- Our Annual Responsible Investment Objectives

- Our Stewardship Priorities and progress against them

- The implementation of our ESG Integration Policies (for all asset classes)

- The implementation of our clients' ethical screens

Responsible Investment papers are also filed at the asset class specific committees. For instance, the Cash Management Committee recieves an annual review of our Money Market Funds' counterparties' ESG standards and the progress made through engagement with them.

 

 


SG 06. Main goals/objectives this year

06.1. List the main responsible investment objectives that your organisation set for the reporting year.

Responsible investment processes

Key performance indicator

          During the reporting year we prioritised the development of bespoke CCLA ESG rating process. This was to include quantitative and qualitative reviews of companies.
        

Progress achieved

We have completed the development of a new system for rating companies' corporate governance standards. This is based upon two approaches. First, we take data from a number of different sources to create an overall corporate governance rating. Second, this is supplemented by a qualitative assessment and due-diligence calls with the companies that are we interested in investing in. This breaks the investment universe down into different risk categories. Companies that display the highest levels of governance risk are not investable without the explicit permission of both the Chief Investment Officer and the Head of Responsible Investment.

We have completed re-developing our standing climate change and investment policy. This mandates a high level of due diligence (including comparison against the steps needed to comply with the Paris Agreement) for companies in the most climate-exposed sectors.

We are continuing to develop a new process for rating companies on their wider environmental and social risks. In the intervening period our existing approach, that is based upon MSCI's ESG Ratings, continues to be implemented. We aim for this process to be completed in the first half of 2019.

Financial performance of investments

ESG characteristics of investments

Key performance indicator

          Implement CCLA's Carbon Footprint limit.
        

Progress achieved

During the reporting year we developed and implemented an updated Climate Change and Investment Policy. This is available at https://www.ccla.co.uk/our-policies/climate-change-and-investment-policy.

This policy commits CCLA to managing all equity portfolios to a carbon footprint that is significantly below that of the MSCI World Index. This has been achieved during the year; the average footprint of a CCLA equity portfolio is currenty approximately one third of that of the MSCI World Index.

Other activities

06.2. Additional information.

Recognising the importance that CCLA attaches to Responsible Investment we have made achieving at least an ‘A’ Grade in all applicable areas of the Principles for Responsible Investment’s (PRI) Annual Assessment one of a small number of core, company-wide, Key Performance Indicators.

Due to the comprehensive nature of the PRI Assessment process this requires constant improvement in all areas of our responsible investment activities.


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