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Local Pensions Partnership

PRI reporting framework 2020

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

Monitoring

SAM 05. Monitoring processes (listed equity/fixed income)

05.1. When monitoring managers, indicate which of the following types of responsible investment information your organisation typically reviews and evaluates

ESG objectives linked to investment strategy (with examples)

Evidence on how the ESG incorporation strategy(ies) affected the investment decisions and financial / ESG performance of the portfolio/fund

Compliance with investment restrictions and any controversial investment decisions

ESG portfolio characteristics

How ESG materiality has been evaluated by the manager in the monitored period

Information on any ESG incidents

Metrics on the real economy influence of the investments

PRI Transparency Reports

PRI Assessment Reports

RI-promotion and engagement with the industry to enhance RI implementation

Changes to the oversight and responsibilities of ESG implementation

Other general RI considerations in investment management agreements; specify

None of the above

LE

Property
ESG objectives linked to investment strategy (with examples)
Evidence on how the ESG incorporation strategy(ies) affected the investment decisions and financial / ESG performance of the portfolio/fund
Compliance with investment restrictions and any controversial investment decisions
ESG portfolio characteristics
How ESG materiality has been evaluated by the manager in the monitored period
Information on any ESG incidents
Metrics on the real economy influence of the investments
PRI Transparency Reports
PRI Assessment Reports
RI-promotion and engagement with the industry to enhance RI implementation
Changes to the oversight and responsibilities of ESG implementation
Other general RI considerations in investment management agreements; specify
None of the above

If you select any `Other` option(s), specify

LPPI's external property Investment Advisor provides quarterly investment management reporting which identifies sustainability characteristics of specific interest to us. Their investment process measures ESG criteria through the investment cycle using the following techniques and statistics which they record at individual asset level and, where possible aggregate up and report at portfolio level

  • Energy Performance Certificate (EPC) ratings for properties under management which include details of the remedial works due to take place (for low rated properties which are under Action Plans to improve ratings).
  • Sustainability Risk Assessments - Carbon, Waste, Water and Transport. Intensity for properties where usage information is available
  • Solar PV panel instalations and quarterly revenues generated

We recognise that some ESG characteristics cannot be measured by quantitative techniques.  Although there is a rational link between energy efficiency, occupational cost and therefore letting prospects, it isn't yet possible to prove this with measurable statistics from the property market.  Equally, whilst good design is likely to be associated with strong letting prospects, there are no statistics available to measure and manage properties according to this principle.  These ESG criteria are assessed in a more subjective manner.

 

05.2. When monitoring external managers, does your organisation set any of the following to measure compliance/progress

ESG score or assessment

ESG weight

ESG performance minimum threshold

Real world economy targets

Other RI considerations

None of the above

LE

Property
ESG score
ESG weight
ESG performance minimum threshold
Real world economy targets
Other RI considerations
None of the above

If you select any `Other` option(s), specify

Listed Equities

LPPI reviews each manager's performance in meeting our reporting requirements and their receptivity to ad hoc requests for information. We also consider how they have 

  • supported us to meet client needs
  • shared insights which have helped us evolve our approach to RI.

In 2019 our review has added the manager's portfolio ESG score based on proprietory ESG metrics.

Property

LPPI's internal team has procedural oversight of decision-making by our principal external manager (Property) which enables us to review the due diligence preceding investment decisions. This allows us to review proposal papers, provide comments and pose questions (where appropriate) on aspects of specific interest to us. For example we may ask for information on how an assessment of building sustainability has been made and what considerations have been included for delivering improvements to this in the future.

We may also pose questions on any specific ESG issues identified. We recognise that UK Full Repairing and Insuring (FRI) lease structures often place responsibility for the management and maintenance of the property on the occupier and restrict the manager’s ability to make physical changes to the building thereby limiting the ability to directly influence ESG criteria. 

05.3. Provide additional information relevant to your organisation`s monitoring processes of external managers. [OPTIONAL]

          
        

SAM 06. Monitoring on active ownership (listed equity/fixed income)

06.1. When monitoring managers, indicate which of the following active ownership information your organisation typically reviews and evaluates from the investment manager in meetings/calls

Engagement

Report on engagements undertaken (summary with metrics, themes, issues, sectors or similar)

Report on engagement ESG impacts (outcomes, progress made against objectives and examples)

Information on any escalation strategy taken after initial unsuccessful dialogue

Alignment with any eventual engagement programme done internally

Information on the engagement activities’ impact on investment decisions

Other RI considerations relating to engagement in investment management agreements; specify

None of the above

LE

Report on engagements undertaken (summary with metrics, themes, issues, sectors or similar)
Report on engagement ESG impacts (outcomes, progress made against objectives and examples)
Information on any escalation strategy taken after initial unsuccessful dialogue
Alignment with any eventual engagement programme done internally
Information on the engagement activities’ impact on investment decisions
Other RI considerations relating to engagement in investment management agreements; specify
None of the above

If you select any `Other` option(s), specify

Where LPPI has identified and shared information with managers on specific priorities (climate change risk for example) we will request insights on how engagements and collaborations underway with relevant companies reflect and address these concerns, what progress activities are aiming to achieve and whether there are signs of positive change.


SAM 07. Percentage of (proxy) votes

07.2. For the listed equities for which you have given your external managers a mandate to engage on your behalf, indicate the approximate percentage (+/- 5%) of companies that were engaged with during the reporting year.

251 Number of companies engaged
48 Proportion (to the nearest 5%)

07.3. Additional information [OPTIONAL]

          
        

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