The Pension Protection Fund has announced two steps aimed at enhancing its approach to responsible investing.
The Pension Protection Fund (PPF) has appointed asset management company, F&C Investments, to provide voting and engagement services for its UK equities. The company will also provide advice on the PPF’s responsible investment strategy.
Secondly, the PPF has decided to make public its UK voting records. This marks the first step towards regular reporting in this area, with the PPF expecting to report on its engagement activities as they develop.
The PPF investment strategy is based on the expectation that companies and governments with sound environmental, social and governance (ESG) principles are more likely to offer strong, long-term financial performance and stability.
As well as exercising all the PPF’s UK voting rights, F&C will engage companies in its UK portfolio, encouraging them to adopt best practice on a range of relevant issues such as corporate governance arrangements, transparency and reporting and climate change.
The PPF will continue to monitor the extent to which its fund managers address ESG issues, and will look to expand its responsible investment activities to other asset classes over time.
Martin Clarke, director of financial risk at PPF, said: These moves will help make sure that we build on our commitment, set out in our investment principles, to take account of ESG considerations when deciding where to invest. We believe that encouraging good practice in this area can reduce market risk and preserve shareholder value over the long-term.