This report shows public data only. Is this your organisation? If so, login here to view your full report.

Shell Contributory Pension Fund

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

Fixed income - Corporate (financial)

ESG incorporation in investment decision making: All internal Fixed Income Corporate (financial) portfolio managers have access to MSCI ESG data. This includes ESG Ratings & Research, Controversial Conduct scores and Climate Change metrics. The data is used as an input for portfolio monitoring and is considered as part of the risk/return analysis when making investment decisions.

Green bonds: The market for green bonds is increasing for Corporate Credit offerings and is considered in the security-selection phase. SCPF has a positive attitude towards this asset category and green bonds will be added to the portfolio where deemed appropriate.

Engagement: SCPF has recruited Hermes EOS for engagement activities on its corporate credit holdings (incl. financial).

Exclusions: PMs refrain from owning financial instruments of companies on the SCPF exclusion list. This could be because of involvement in the manufacture, sale or distribution of cluster munitions and anti-personnel landmines or because of controversial conduct/UNGC non-compliance combined with unsuccessful engagement (or direct divestment in case of overtly unacceptable activities).

Fixed income - Securitised

Portfolios are managed internally but instruments held are managed by external parties. These parties have been inquired about their ESG policies and implementation.

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

Listed equities - ESG incorporation

ESG considerations are taken into account in the manager-selection process. Managers contending for a mandate are required to fill out an RfP which includes ESG-related questions.

Better-articulated and more-integrated ESG policies, scrutinised in the due diligence process (including resources, staff, systems and databases dedicated to ESG), will compare favourably as part of the aggregate scoring of the manager’s organisation and investment process. As part of the operational due diligence (ODD) process, SAMCo puts emphasis on a thorough review of the manager’s governance structure. The ODD also includes a check on whether the firm is a signatory to the UNPRI which is a preference but not a formal requirement.

Any manager ultimately selected will be required to provide a declaration to refrain from investments in companies that are involved in the manufacture, sale or distribution of cluster munitions and anti-personnel landmines. Furthermore, managers are required to live by the Shell General Business Principles or have equivalent principles in place. These principles are in line with the United Nations Global Compact.

After selection, SCPF - via SAMCo - engages with the managers to ensure ESG considerations remain on their agenda.

Listed equities - engagement

Hermes Equity Ownership Services (EOS) undertakes engagement on behalf of SCPF. Engagement with companies is undertaken both for monitoring and influencing purposes and, where relevant, to address strategic issues relevant to long-term value. Hermes EOS's engagements also address the major themes of the environment and governance as well as social and ethical issues. Progress is monitored by reference to a system of 'milestones' to ensure that satisfactory progress is made over a reasonable period of time. On the SCPF website, a quarterly engagement activity overview is provided.

Listed equities - (proxy) voting

It is SCPF's policy to exercise its voting rights in all practicable cases based on its agreed voting principles. SCPF has delegated voting on entities that it invests in to Hermes EOS. Hermes EOS provides ‘intelligent voting’ services to SCPF. This means that all proxies are voted with reference to the individual circumstances of the company and the vote, rather than by 'box ticking' or as a compliance driven activity. This includes considering the merits of and voting on specific shareholder resolutions. A general report of the voting activities of SCPF can be found on the website. Voting policy is in principle implemented for the entire equity portfolio. In some jurisdictions legal requirements (blocking of shares for extended periods, notarisation requirements etc.) are prohibitive and consequently still obstruct the exercise of voting rights in practice.

Fixed income - SSA

ESG considerations are taken into account in the manager-selection process. Managers contending for a mandate are required to fill out an RfP which includes ESG-related questions.

Better-articulated and more-integrated ESG policies, scrutinised in the due diligence process (including resources, staff, systems and databases dedicated to ESG), will compare favourably as part of the aggregate scoring of the manager’s organisation and investment process. As part of the operational due diligence (ODD) process, SAMCo puts emphasis on a thorough review of the manager’s governance structure. The ODD also includes a check on whether the firm is a signatory to the UNPRI which is a preference but not a formal requirement.

Any manager ultimately selected will be required to provide a declaration to refrain from investments in issuers that are not included in the SCPF investable universe (based i.a. on ESG considerations). Furthermore, managers are required to live by the Shell General Business Principles or have equivalent principles in place. These principles are in line with the United Nations Global Compact.

After selection, SCPF - via SAMCo - engages with the managers to ensure ESG considerations remain on their agenda.

Fixed income - Corporate (non-financial)

ESG considerations are taken into account in the manager-selection process. Managers contending for a mandate are required to fill out an RfP which includes ESG-related questions.

Better-articulated and more-integrated ESG policies, scrutinised in the due diligence process (including resources, staff, systems and databases dedicated to ESG), will compare favourably as part of the aggregate scoring of the manager’s organisation and investment process. As part of the operational due diligence (ODD) process, SAMCo puts emphasis on a thorough review of the manager’s governance structure. The ODD also includes a check on whether the firm is a signatory to the UNPRI - which is a preference but not a formal requirement.

Any manager ultimately selected will be required to provide a declaration to refrain from investments in companies that are involved in the manufacture, sale or distribution of cluster munitions and anti-personnel landmines. Furthermore, managers are required to live by the Shell General Business Principles or have equivalent principles in place. These principles are in line with the United Nations Global Compact.

After selection, SCPF - via SAMCo – engages with the managers to ensure ESG considerations remain on their agenda.

Private equity

SCPFs approach to the incorporation of ESG considerations in the manager-selection process for Private Equity portfolios is broadly similar to the approach for Listed Equity portfolios (as described above). Furthermore, SCPF - via SAMCo - is involved in various initiatives to bring attention to ESG considerations in the Private Equity industry. For instance, through participation in the Institutional Limited Partners Association (ILPA) which has pushed for topics like approval of conflicts of interests by LPACs and increased disclosure of non-financial sustainability metrics.

Property

SCPFs approach to the incorporation of ESG considerations in the manager-selection process for Real Estate portfolios is broadly similar to the approach for Listed Equity portfolios (as described above). Furthermore, SCPF - via SAMCo - requests its Real Estate managers to participate in the Global Real Estate Sustainability Benchmark (GRESB) survey on an annual basis and engages in conversations with managers on the improvement of their scores. This survey is the leading tool for assessing the ESG characteristics of Real Estate portfolios. SCPF strives for a 100% participation rate among its Real Estate managers. SAMCo reports on the positioning of the SCPF Real Estate portfolio compared with the GRESB.

Hedge funds - DDQ

Select whether you use the PRI Hedge Fund DDQ

Hedge funds

SCPFs approach to the incorporation of ESG considerations in the manager-selection process for Hedge Fund portfolios is broadly similar to the approach for Listed Equity portfolios (as described above).

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

SCPFs approach to the incorporation of ESG considerations in the manager-selection process for investments outside the traditional alternative strategies is broadly similar to the approach for Listed Equity portfolios (as described above).

17.2. Additional information.


Top