Border to Coast continues to make a difference as a responsible investor

29 July 2022

• New reports highlight role as an active steward of LGPS assets through votes on more than 12,000 resolutions at investee companies.
• Key achievements include its Net Zero pledge and acceptance as signatory to the FRC UK Stewardship Code.
• £1.35bn Climate Opportunities proposition launched during the reporting year, targeting investments to drive a positive impact on climate change.

Border to Coast Pensions Partnership (“Border to Coast”) has published its annual Responsible Investment and Stewardship Report, demonstrating the progress it has continued to make as an active steward of Local Government Pension Scheme (LGPS) assets in 2021/22. It has also published its Task Force on Climate-Related Financial Disclosures (TCFD) Report, which further evidences its commitment to transparency in reporting.

Now responsible for £38.3bn, Border to Coast’s Responsible Investment & Stewardship Report highlights the significant progress it has made, including the publication of its Climate Change Policy which includes the commitment to achieving Net Zero by 2050 or sooner; joining the Net Zero Asset Manager initiative; the strengthening of its voting guidelines on climate change and diversity; and becoming a signatory to the UK Stewardship Code.

In the year, Border to Coast voted on 12,206 resolutions at investee companies, and 1,672 engagements were held with companies. Key votes included voting against a Climate and Transition Plan proposed by mining firm BHP Group on the basis it was not ambitious enough in its aims; supporting a shareholder resolution requiring Costco Wholesale to commit to reductions in greenhouse gas emissions; and supporting SSE’s Net Zero Business Plan.

The Responsible Investment and Stewardship Report also shows Border to Coast voted at 930 meetings. In terms of votes against, the biggest category was Board members representing 33% of votes against, followed by remuneration at 21%.

The 2021/22 period was Border to Coast’s third year of reporting in line with the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD). The report details its approach to managing climate-related risks and opportunities within the four thematic areas of Governance, Strategy, Risk Management and Metrics and Targets.

During the reporting year, Border to Coast launched its second Private Markets programme, with £4bn of commitments from its Partner Funds, which included a £1.35bn Climate Opportunities proposition, targeting investments that will have a material positive impact on climate change.

Border to Coast is also part of a collaboration of pension funds together representing almost £400bn in assets exploring how they can drive real world change through investments which support the climate transition in emerging markets.

Together, the two reports set out Border to Coast’s work as a responsible investor in depth, highlight the strength of the collective voice provided by pooling, and the positive impact it can have.

Rachel Elwell, CEO at Border to Coast, said: “Working with our Partner Funds as one of the largest LGPS pools in the UK, we continue to make significant progress in influencing and driving standards through developing our approach to responsible investment. Collaboration is one of our core values, and we use the strength offered by our collective scale to influence the companies we invest in and to support industry-initiatives. We continue to believe in the power of engagement, and these reports set out the impact we are having both within the investment industry and across the global companies in which we invest.”

Jane Firth, Head of Responsible Investment at Border to Coast, said: “During the year we have continued to enhance our approach to responsible investment, publishing our first standalone Climate Change Policy, strengthening our voting positions around our engagement themes and further developing our reporting. Working with our Partner Funds we will continue to evolve our approach to reflect new risks, regulation and emerging opportunities.”

Source: Border to Coast