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Local Pensions Partnership

PRI reporting framework 2020

You are in Strategy and Governance » Asset class implementation not reported in other modules

Asset class implementation not reported in other modules

SG 16. ESG issues for internally managed assets not reported in framework

Describe how you address ESG issues for internally managed assets for which a specific PRI asset class module has yet to be developed or for which you are not required to report because your assets are below the minimum threshold.

Asset Class

Describe what processes are in place and the outputs or outcomes achieved

Infrastructure

LPPI invest in infrastructure on behalf of participating pension funds seeking exposure to real assets.

Our Global Infrastructure Pool seeks to gain cost-effective, diversified exposure to global infrastructure assets, predominantly in the UK, Europe and North America through primary infrastructure funds, co-investments and direct ownership of infrastructure assets. 

Infrastructure investments are illiquid and intended to be held long term. It is acknowledged that future risks and opportunities will play out over an extended time horizon and be affected by multiple micro and macro influences. This context requires confidence in the strength of underlying governance structures (or their capacity to be developed) and in the quality of strategic decision-making and its implementation.

We address ESG issues in our internally managed infrastructure assets through the following:

  • a detailed process of due diligence preparatory to us making any investment
  • ensuring we can secure appropriate ownership influence (relative to risk) 
  • clear routes for exercising influence during the investment period (board seat or other representation)
  • productive relationships and regular dialogue with management and / or critical parties
  • internal staff/external partners with deep experience of specific infrastructure sectors (knowledge and experience to pre-empt issues, anticipate and mitigate impacts and partner companies whilst holding them to account).

 

16.2. Additional information [Optional].


SG 17. ESG issues for externally managed assets not reported in framework

17.1. Describe how you address ESG issues for externally managed assets for which a specific PRI asset class module has yet to be developed or for which you are not required to report because your assets are below the minimum threshold.

Asset Class

Describe what processes are in place and the outputs or outcomes achieved

Fixed income - SSA

For externally managed assets, LPPI addresses ESG integration via our process for selecting, appointing and monitoring the managers we choose to work with us. 

We set clear standards and ensure these are shared with prospective managers from the outset.

We ask managers to complete a detailed RI Due Diligence Questionnaire and follow-up their answers within a dialogue focussed on establishing/confirming their approach, arrangements, resourcing, capabilities and alignment with our beliefs and requirements.

All managers are PRI signatories and we review their latest Transparency Report and Assessment Report.annually.

Our investment management agreements identify our requirement for external managers to support the fulfillment of the commitments we have made as a PRI signatory.

Outcomes

We ensure all external managers can demonstrate a base level commitment to RI and ESG integration and have a clear understanding of the importance of this to us and our client funds.

Our managers understand our policy and our position and accommodate our reasonable information needs. They are also generally responsive to requests for further information on an ad hoc basis.

Managers are willing to share insights and explanations with us on request and are aware of priority themes or areas of particular sensitivity.

Fixed income - Corporate (financial)

For externally managed assets, LPPI address ESG integration via our process for selecting, appointing and monitoring the managers we choose to work with us. 

We set clear standards and ensure these are shared with prospective managers from the outset.

We ask managers to complete a detailed RI Due Diligence Questionnaire and follow-up their answers within a dialogue focussed on establishing/confirming their approach, arrangements, resourcing, capabilities and alignment with our beliefs and requirements.

All managers are PRI signatories and we review their latest Transparency Report and Assessment Report annually.

Our investment management agreements identify our requirement for external managers to support the fulfillment of the commitments LPP has made as a PRI signatory.

Outcomes

We ensure all external managers can demonstrate a base level commitment to RI and ESG integration and have a clear understanding of the importance of this to us and our client funds.

Our managers understand our policy and our position and accommodate our reasonable information needs. They are also generally responsive to requests for further information on an ad hoc basis.

Managers are willing to share insights and explanations with us on request and are aware of priority themes or areas of particular sensitivity.

Fixed income - Corporate (non-financial)

For externally managed assets, LPPI addresses ESG integration via our process for selecting, appointing and monitoring the managers we choose to work with us. 

We set clear standards and ensure these are shared with prospective managers from the outset.

We ask managers to complete a detailed RI Due Diligence Questionnaire and follow-up their answers within a dialogue focussed on establishing/confirming their approach, arrangements, resourcing, capabilities and alignment with our beliefs and requirements.

All managers are PRI signatories and we review their latest Transparency Report and Assessment Report annually.

Our investment management agreements identify our requirement for external managers to support the fulfillment of the commitments we have made as a PRI signatory.

Outcomes

We ensure all external managers can demonstrate a base level commitment to RI and ESG integration and have a clear understanding of the importance of this to LPP and our client funds.

Our managers understand our policy and our position and accommodate our reasonable information needs. They are also generally responsive to requests for further information on an ad hoc basis.

Managers are willing to share insights and explanations with us on request and are aware of priority themes or areas of particular sensitivity.

Fixed income - Securitised

For externally managed assets, LPPI addresses ESG integration via our process for selecting, appointing and monitoring the managers we choose to work with us. 

We set clear standards and ensure these are shared with prospective managers from the outset.

We ask managers to complete a detailed RI Due Diligence Questionnaire and follow-up their answers within a dialogue focussed on establishing/confirming their approach, arrangements, resourcing, capabilities and alignment with our beliefs and requirements.

All managers are PRI signatories and we review their latest Transparency Report and Assessment Report annually.

Our investment management agreements identify our requirement for external managers to support the fulfillment of the commitments we have made as a PRI signatory.

Outcomes

We ensure all external managers can demonstrate a base level commitment to RI and ESG integration and have a clear understanding of the importance of this to LPP and our client funds.

Our managers understand our policy and our position and accommodate our reasonable information needs. They are also generally responsive to requests for further information on an ad hoc basis.

Managers are willing to share insights and explanations with us on request and are aware of priority themes or areas of particular sensitivity.

Private equity

For externally managed assets, LPPI addresses ESG integration via our process for selecting, appointing and monitoring the managers we choose to work with us. 

We set clear standards and ensure these are shared with prospective managers from the outset.

We ask managers to complete a detailed RI Due Diligence Questionnaire and follow-up their answers within a dialogue focussed on establishing/confirming their approach, arrangements, resourcing, capabilities and alignment with our beliefs and requirements.

Where managers are PRI signatories we review their latest Transparency Report and request their most recent Assessment Report.

Our investment management agreements identify our requirement for external managers to support the fulfillment of the commitments LPP has made as a PRI signatory.

Outcomes

We ensure all external managers can demonstrate a base level commitment to RI and ESG integration and have a clear understanding of the importance of this to LPP and our client funds.

Our managers understand our policy and position and accommodate our reasonable information needs. They are also generally responsive to requests for further information on an ad hoc basis.

Managers are willing to share insights and explanations with us on request and are aware of priority themes and areas of particular sensitivity.

Infrastructure

Infrastructure Pool (Externally Managed Investments)

LPPI invests in infrastructure on behalf of clients through a combination of externally and internally managed primary infrastructure funds, co-investments and directly owned infrastructure assets.

For externally managed assets, LPPI addresses ESG integration via our process for selecting, appointing and monitoring the managers we choose to work with us. 

We set clear standards and ensure these are shared with prospective managers from the outset.

We ask managers to complete a detailed RI Due Diligence Questionnaire and follow-up their answers within a dialogue focussed on establishing/confirming their approach, arrangements, resourcing, capabilities and alignment with our beliefs and requirements.

Where managers are PRI signatories we review their latest Transparency Report and request their most recent Assessment Report.

Our investment management agreements identify our requirement for external managers to support the fulfillment of the commitments LPP has made as a PRI signatory.

Outcomes

We ensure all external managers can demonstrate a base level commitment to RI and ESG integration and have a clear understanding of the importance of this to LPP and our client funds.

We articulate our information requirements to all managers and also explain our priority issues to ensure they are aware of any key sensitivities.

 

Cash

LPPI discusses and agrees specifc needs with individual investment managers.

Other (1) [as defined in Organisational Overview module]

Credit Pool (Externally Managed)

LPPI addresses ESG integration via our process for selecting, appointing and monitoring the managers we choose to work with us. 

We set clear standards and ensure these are shared with prospective managers from the outset.

We ask managers to complete a detailed RI Due Diligence Questionnaire and follow-up their answers within a dialogue focussed on establishing/confirming their approach, arrangements, resourcing, capabilities and alignment with our beliefs and requirements.

Where managers are PRI signatories we review their latest Transparency Report and request their most recent Assessment Report.

Our investment management agreements identify our requirement for external managers to support the fulfilment of the commitments LPP has made as a PRI signatory.

Outcomes

LPPI ensures all external managers can demonstrate a base level commitment to RI and ESG integration and have a clear understanding of the importance of this to LPP and our client funds.

Our managers understand our policy and our position and accommodate our reasonable information needs. They are also generally responsive to requests for further information on an ad hoc basis.

Managers are willing to share insights and explanations with us on request and are aware of priority themes and areas of particular sensitivity.

Other (2) [as defined in Organisational Overview module]

Diversifying Strategies Pool (Externally Managed)

LPPI address ESG integration via our process for selecting, appointing and monitoring the managers we choose to work with us. 

We articulate clear standards and ensure expectations are shared with prospective managers from the outset.

We ask managers to complete a detailed RI Due Diligence Questionnaire and follow-up their answers within a dialogue focussed on establishing/confirming their approach, arrangements, resourcing, capabilities and alignment with our beliefs and requirements.

Where managers are PRI signatories we review their latest Transparency Report and request their most recent Assessment Report.

Our investment management agreements identify our requirement for external managers to support the fulfilment of the commitments LPP has made as a PRI signatory.

Outcomes

Our managers understand our position and policy commitments and work with us to establish the extent to which these can be directly supported through the opportunties and approaches which fall within the diversifying strategies pool.

Managers are willing to share insights and explanations with us, provide information to the extent this is readily available and help us to share insights with our clients on relevent themes.

 

17.2. Additional information.


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