The Kelda Group Pension Plan (the “Plan”) recently published its Implementation Statement, covering the Plan Year from 1 April 2024 to 31 March 2025. This document outlines the Trustee’s adherence to its Statement of Investment Principles (SIP) regarding voting and engagement policies.
Sustainability Requirements Integrated into Credit Portfolio
The Trustee has incorporated “sustainability requirements and restrictions” into the guidelines for Insight’s buy and maintain credit portfolio. These measures are designed to ensure Insight engages with bond issuers when the portfolio falls outside specific constraints. This includes limits on corporate bond issuers that have not committed to achieving net zero emissions by 2050 and restrictions on investing in issuers involved in “socially sensitive” industries. (Implementation Statement, covering the Plan Year from 1 April 2024 to 31 March 2025, page 2)
Manager Engagement on ESG and Net Zero
In March 2025, the Trustee met with its liability-driven investment, buy and maintain credit, and asset-backed securities manager, Insight. The purpose of this engagement was to discuss Insight’s current and planned incorporation of ESG issues within its stewardship activities and the practical implications of net zero on the Plan’s portfolios. The Trustee used this opportunity to pose questions and challenge Insight on these matters, prioritizing the best interests of the Plan’s members. (Implementation Statement, covering the Plan Year from 1 April 2024 to 31 March 2025, page 2)
Review of Manager Responsible Investment Scores
In February 2025, the Trustee reviewed LCP’s responsible investment (“RI”) scores and qualitative RI assessments for the Plan’s existing managers and funds. These scores encompass the manager’s approach to ESG factors, voting and engagement, and identify any managers of concern. The fund scores and assessments are based on LCP’s ongoing manager research program, which directly influences LCP’s manager and fund recommendations. The manager scores and focus areas for engagement are derived from LCP’s Responsible Investment Survey 2024. The Trustee expressed satisfaction with the review results, and no further action was deemed necessary. (Implementation Statement, covering the Plan Year from 1 April 2024 to 31 March 2025, page 2)
Stewardship Priorities Communicated to Managers
The Trustee has established stewardship priorities to guide monitoring and engagement with its investment managers on specific ESG factors: climate change, human rights, and corporate transparency. These priorities were selected due to the Trustee’s view of them as key market-wide risks and areas where effective stewardship and engagement can enhance long-term financial outcomes for Plan members. These priorities were communicated to the investment managers in April 2023. (Implementation Statement, covering the Plan Year from 1 April 2024 to 31 March 2025, page 2)
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