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LGPS Central

PRI reporting framework 2020

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Asset class implementation gateway indicators

OO 10. Active ownership practices for listed assets

10.1. Select the active ownership activities your organisation implemented in the reporting year.

Listed equity – engagement

Listed equity – voting


OO 11. ESG incorporation practices for all assets

11.1. Select the internally managed asset classes in which you addressed ESG incorporation into your investment decisions and/or your active ownership practices (during the reporting year).

Listed equity

Select the externally managed assets classes in which you and/or your investment consultants address ESG incorporation in your external manager selection, appointment and/or monitoring processes.
Asset class
ESG incorporation addressed in your external manager selection, appointment and/or monitoring processes
Listed equity

Listed equity - ESG incorporation addressed in your external manager selection, appointment and/or monitoring processes

11.4. Provide a brief description of how your organisation includes responsible investment considerations in your investment manager selection, appointment and monitoring processes.

The investment manager’s approach to RI and engagement is assessed as part of the selection and due diligence process. External managers will not be appointed unless LGPS Central is satisfied with the manager’s approach to RI including incorporation of ESG factors. We expect managers to incorporate ESG factors, including climate change, into investment decision-making where those factors are financially material within the context of the investment mandate. Financial materiality is expected to be determined using an evidence base of objective data, including for instance factors relating to climate change and the effects of climate policy response where relevant. We want to see an approach where RI/ESG is considered in tandem with other performance drivers, rather than a ring-fenced or stand-alone RI-function. We seek fund managers whose approach to integrating ESG investment factors increases the likelihood of the manager meeting the mandate instructions, and whose approach is well suited to their investment style and strategy.  

RI expectations are inserted into the procurement process, for example at Selection Questionnaire, Request for Proposal and Interviews. The process will be executed with  input from the RI and Engagement team as well as other members of the Company’s Investment Team as appropriate. Once appointed, we require external fund managers to complete a quarterly ESG questionnaire. Some disclosure items are "by exception" (for example alerting us to changes in ESG process or personnel) and others are mandatory. LGPS Central receives quarterly data from external fund managers on the number of engagements undertaken and the weight in portfolio. We set expectations regarding the volume and quality of engagement, and we assess climate risk including portfolio carbon footprint, and exposure to oil, gas and coal producers. In order to send a unique voting signal to investee companies LGPS Central votes its shares - whether externally or internally managed - according to one set of Voting Principles. Whilst the ultimate voting decision rests with LGPS Central, we have a procedure through which we capture intelligence and recommendations from external fund managers.  

 


OO 12. Modules and sections required to complete

12.1. Below are all applicable modules or sections you may report on. Those which are mandatory to report (asset classes representing 10% or more of your AUM) are already ticked and read-only. Those which are voluntary to report on can be opted into by ticking the box.

Core modules

RI implementation directly or via service providers

Direct - Listed Equity incorporation

Direct - Listed Equity active ownership

RI implementation via external managers

Indirect - Selection, Appointment and Monitoring of External Managers

Closing module

12.2. Additional information. [Optional]


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