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Environment Agency Pension Fund

PRI reporting framework 2020

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

Outputs and outcomes

SAM 08. Percentage of externally managed assets managed by PRI signatories

08.1. Describe how you ensure that best RI practice is applied to managing your assets

Measures

          Annual review meeting where we question RI practices and make suggestions of best practice where appropriate. 
Continual monitoring of reporting and make suggestions of best practice where appropriate. 
Selective monitoring of AGMs and/or voting and dialogue on specific voting decisions. 
Monitoring of approach to current risks, for example in 2019 we wrote to all our managers about deforestation.
        

Measures

          EAPF and Brunel are committed to integrating RI across all asset classes.  Details of the approach is set out in the RI and Stewardship Policies.   
Brunel also provides for low carbon equities in its listed markets in which EAPF invests through Brunel. The EAPF also invests significantly in Global Sustainable Equities.  
Private markets has a focus in renewables and proactively identifies impact investment opportunities across PM which supports EAPF's current private markets investments.
        

08.2. Additional information. [Optional]


SAM 09. Examples of ESG issues in selection, appointment and monitoring processes

09.1. Provide examples of how ESG issues have been addressed in the manager selection, appointment and/or monitoring process for your organisation during the reporting year.

Topic or issue
          Annual manager review meetings
        
Conducted by
Asset class
Scope and process

Annually we ask around 80% of our fund managers across all asset classes to attend an in-person review meeting.

Our panel consists of officers, pension committee members, investment consultants and external subject matter experts.

Part of the meeting is always dedicated to RI, and carbon footprinting where appropriate.

Outcomes

On RI we asked managers to report specifically on:

Their process for considering physical risks in relation to climate change (CC)
the priority given to climate change in engagement/advocacy and plans for the next 12 months
an update on TCFD reporting both by the manager and the uptake and quality of TCFD reporting for those companies in which we invest.
the managers 2 key ESG priorities (after CC) and engagement/advocacy plans for the next 12 months

The outcome is that we are pleased that in relation to the above the vast majority of our managers are performing as we would expect. Where there isn't a valid reason why they are not, through the meeting the manager is clear what our expectations are and they know we will follow up post meeting and the following year, so we expect that progress will be made, which is evidenced from prior years.

We challenge managers on highest carbon emitters/where there is a lack of carbon reporting and we know that managers engage and there is a year-on-year reduction in the carbon footprint of mandates and lower incidences of modelling companies carbon emissions.

Topic or issue
          Whether our investments are implicated in deforestation.
        
Conducted by
Asset class
Scope and process

We wrote to all our managers asking them if our mandate with them has companies that may directly/indirectly be contributing to deforestation and to be made aware of any recent action taken or planned to address the deforestation issue. Also, if any of our holdings have made/will make a positive contribution to forestation.

 

Outcomes

Highlighting to managers that an asset owner sees deforestation as a serious issue and is monitoring them on the issue.

Reassurance that the vast majority of our assets do not contribute to deforesation and where there has been a potential risk, mitigation is in place.

Topic or issue
          How climate change risk is being addressed by the companies in which we invest
        
Conducted by
Asset class
Scope and process

In 2019 we began our initiative of attending the AGMs of companies in which we invest. As part of our analysis in preparing our question we contacted the relevant fund manager(s) requesting ESG information about the company(ies). 

Outcomes

In one example we were made aware of an issue. We raised this directly with the Board of the company, who welcomed the question. Further engagement commenced at the AGM (following the formal meeting), more meetings have taken place and the engagement is ongoing.

09.2. Additional information.


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