Border to Coast’s Responsible Investment and Stewardship Report: High levels of engagement and robust voting on climate and social issues
Posted on August 3rd, 2023
- Active stewardship of LGPS Funds sees 1,800+ engagements undertaken and votes on 13,000+ resolutions
- Voting Guidelines on climate and diversity are strengthened
- Collaboration boosts engagement impact
Border to Coast Pensions Partnership’s newly published Responsible Investment and Stewardship Report details high levels of engagement and a robust voting track record on climate and diversity issues during the year ended 31 March 2023.
Of the assets owned by Border to Coast’s 11 Local Government Pension Scheme ‘Partner Funds’, 83% are pooled, with the company having direct responsibility for £40.3bn. Given its long-term investment horizon, sustainability is a fundamental value for the pension pool, which puts significant resource into active stewardship in order to deliver on responsible investment (RI).
Engagement and voting
Having launched four new priority engagement themes (diversity of thought, low carbon transition, social inclusion through labour management, and waste and water management) in 2022, this report details progress against them in terms of engagement, collaboration and voting.
The company has voted against management to a significant extent. The majority of company ‘say on climate’ resolutions were opposed, due to insufficient climate science alignment. Meanwhile a high proportion of independent climate resolutions were supported, in line with Border to Coast’s commitment to Net Zero. Board accountability was also sought for insufficient progress on climate change and diversity.
During the year Border to Coast:
- conducted over 1,800 engagements with companies, independently and in collaboration with others
- voted on over 13,000 resolutions at 970 company meetings
- voted against 93% of company transition plans
- voted to support 73% of climate-related shareholder proposals
- voted against management on 163 occasions, on diversity grounds, an increase of 70% on 2021/22
At the start of 2023 Border to Coast strengthened its voting policy to clearly communicate its positions on climate change and diversity. This is guiding its voting position through the current AGM season.
Collaboration
By collaborating with like-minded investors and organisations, Border to Coast amplifies its influence on behalf of its Partner Funds to create greater impact when voting and engaging with investments. This approach also addresses the need for collaborative efforts to tackle market-wide and systemic risks.
For example, the company joined a collaborative engagement initiative led by Royal London Asset Management (RLAM) with the water utility sector in the UK. It aims to improve practice, define best practice and encourage a faster pace of change in companies persistently lagging. Specific areas of focus include water pollution and climate change mitigation and adaptation.
“Our report shows that we put our words into deeds when it comes to the engagement, collaboration and voting that underpin the active stewardship of our Partner Funds’ capital, as a long-term and responsible investor. These are powerful tools for influencing company behaviour, and we are committed to using them to send a strong message to improve standards in both the investment industry and the companies in which we invest for our Partner Funds.”
Climate Change Report (formerly TCFD report)
For details of Border to Coast’s Climate Change Report, with information about the company’s investments to support the net zero transition and progress against its Net Zero Implementation Plan please see this press release.
Recent external recognition for Border to Coast as a responsible investor
- Awarded ‘Best Approach to Responsible Investment’ (LAPF Investments Awards)
- Awarded ‘Investment Industry Contribution to Diversity & Inclusion’ (Investment Week, Women in Investment Awards)
