Responsible Investment Policy
This document describes the Trustee’s approach to Responsible Investment (RI) across the Barclays Bank UK Retirement Fund (the Fund) as part of its fiduciary duty to act in the best interests of beneficiaries. This policy provides an outline of the guiding principles the Trustee has adopted, and the core activities undertaken. These activities chiefly relate to adherence to good practice standards and principles, ownership, disclosure and collaboration; and the integration of environmental, social and corporate governance (ESG) factors.
From 1 July 2025, the Fund has been split into two Sections, which operate independently of each other under the same legal trust, with the same Trustee and managed on a common basis:
- Barclays UK Section; and
- Barclays Bank Section
The Fund’s RI policy is owned by the Trustee Board and is reviewed on an annual basis to reflect any changes and improvements across the two Sections.
The Trustee has appointed a ‘primary’ manager, Oak Pension Asset Management Limited (OPAM), to act in a fiduciary capacity for each Section with duties including but not limited to the appointment and supervision of a number of ‘third party’ investment managers. OPAM has been delegated by the Trustee to oversee certain aspects of the implementation of its RI policy and reports progress regularly, and at least annually, to the Trustee. The Trustee has adopted the following guiding principles for the implementation of its Responsible Investment.
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Guiding principles
Integration The Trustee will integrate RI and ESG factors, including climate change, throughout its investment processes as the Trustee believes doing so should lead to better investment decisions and ultimately improve risk-adjusted returns. Ownership Stewardship is carried out by the Trustee via oversight and challenge of external service providers which enables the Fund to operate as active stewards of the underlying assets in which the Fund invests. The Trustee has appointed OPAM to act in a fiduciary capacity in relation to the Fund. Disclosure Through its stewardship, the Trustee will promote appropriate disclosure on RI issues, including climate change. Good Practice The Trustee will promote recognition of the benefits of RI and its implementation within the investment industry and benchmark itself against global good practice in specific areas. Collaboration Collaborative initiatives can be powerful in effecting positive change, therefore the Fund will be a participant in select initiatives and encourage its service providers and asset managers to undertake activities in this area. Communication The Trustee will make appropriate disclosures on how it implements this policy to both members and wider stakeholders. -
Priority ESG Topics
The Trustee considers climate-related financial risks and their potential implications for both Sections, including the wider RI approach and consideration of ESG factors. Climate change is a key focus of the Fund’s RI approach and involves specific risk management, measurement, stewardship and collaborative efforts as part of the Fund’s wider investment and RI activities. This is set out in the Fund’s Climate Change Risk Management Policy (CCRMP).
The Trustee sees climate change as a key systemic financial risk affecting its investment asset portfolio. In the interest of members, and aligned with the goals of the Paris Agreement, across the portfolio the Trustee aims to halve greenhouse gas emissions by 2030 and to be net zero carbon by 2050 or sooner. The Trustee’s goal is based on the long-term expectation that governments and policy makers will deliver on their commitments. The target will be subject to a periodic review.
The Trustee also recognises nature, including biodiversity loss as a potential systemic financial risk. There is increasing awareness around the financial risks associated with companies’ impact and dependencies on nature, particularly biodiversity. In addition, there is a link to climate change risk: nature plays a key role in regulating the climate through carbon sequestration, maintaining healthy ecosystems, and supporting resilience to climate change impacts. The Trustee acknowledges the challenges associated with data availability and quality in assessing nature-related risks. As such, engagement will be the primary stewardship tool for identifying and managing these risks and dependencies.
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Collaboration and Disclosure
The Trustee frames its RI activities within its regulatory and fiduciary obligations, as well as its commitments as a signatory to the Principles for Responsible Investment (PRI) and UK Stewardship Code.
The Trustee believes that collaborative initiatives can be powerful in effecting positive change and will consider being a direct participant in select initiatives.
The Trustee recognises its position as an asset owner with ultimate responsibility to its members and beneficiaries and recognises that effective stewardship can help protect and enhance the long-term value of its investments to the ultimate benefit of these beneficiaries.
The Trustee will consider various external engagement providers and platforms to maximise its influence as an active owner, including collaboration with other like-minded investors. The Fund’s investment managers are also encouraged to participate in collective engagement where this is an effective means to protect and enhance long-term shareholder value.
In addition, the Trustee recognises the importance of effective corporate disclosure and expects its investment managers to seek appropriate disclosure by its investee companies and promote good standards in this area.
The Trustee signed up to the Principles for Responsible Investment (PRI) in 2015. The Trustee believes that the application of the Fund RI Policy will enable the delivery of the commitments as a signatory to the PRI. The PRI is an investor-led, voluntary initiative which promotes an economically efficient, sustainable global financial system to deliver long-term value. The PRI provides a high-level framework for integrating ESG issues into investment decision-making and ownership practices consistent with investors’ fiduciary duties. The Fund adheres to the six principles of the PRI and reports its activities and developments annually in line with the PRI reporting framework. These reports are available on www.unpri.org.
The Trustee initially signed up to the UK Stewardship Code in 2011. The Code aims to enhance the quality of engagement between investors and companies to help improve long-term risk-adjusted returns to shareholders. In 2021, the Fund became a signatory to the substantially revised and strengthened UK Stewardship Code 2020. A copy of the Stewardship Code Report is available here.
The Trustee is a member of the Institutional Investors Group on Climate Change (‘IIGCC’) Paris Aligned Initiative. This group is the European membership body for investor collaboration on climate change and the voice of investors taking action for a prosperous, low carbon world. IIGCC’s mission is to mobilise capital for the low carbon transition and to ensure resilience to the impacts of a changing climate by collaborating with business, policy makers and fellow investors.
The Trustee (through OPAM) regularly reviews the benefits and costs of existing and potential initiative memberships.
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Integration of ESG factors in manager selection and monitoring
The consideration of ESG factors is incorporated across the Fund’s investment approach, from strategic asset allocation, through manager selection, to portfolio monitoring.
The long-term sustainability of the Fund’s investment strategy is of primary importance, and scenario analysis is used to stress test the portfolio under different conditions, including those driven by ESG issues.
In selecting investment managers, the managers’ policy on and approach to ESG issues is an important factor in the process. The Fund’s RI policy applies to all of its investments although the expectations are tailored according to the different asset classes and the investment style of the manager in question.
Where appropriate, OPAM has reviewed and accepted the appointed managers' policies and monitors these policies on a regular basis. OPAM provides regular reporting to the Trustee to confirm this activity has been carried out appropriately, flagging any issues on an exceptions basis. The managers’ approach to ESG factors and stewardship is discussed at the manager update meetings. The Trustee delegates the oversight of individual assets (including investee companies) to its investment managers.
The Trustee expects its managers to be cognisant of climate and nature related risks and raise material concerns at manager monitoring meetings with OPAM periodically. This ensures that the Trustee (via OPAM) reviews that the Fund’s appointed managers incorporate climate and nature related risks and opportunities into the investment process.
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Ownership – Engagement and Voting Policy
The Trustee recognises its position as an asset owner with ultimate responsibility to its members and beneficiaries and recognises that effective stewardship can help protect and enhance the long-term value of its investments to the ultimate benefit of its beneficiaries.
Stewardship is carried out by the Trustee via oversight and challenge of external service providers which enables the Fund to operate as active stewards of the underlying assets that the Fund invests. The Trustee has appointed OPAM to act in a fiduciary capacity in relation to the Fund. This is set out in the Fund’s Stewardship Policy.
For the Defined Contribution (‘DC’) arrangements the Trustee has delegated the day-to-day stewardship activities, including voting and engagement, to its Investment Managers.
The Trustee has appointed EOS at Federated Hermes Limited (EOS) as a dedicated specialist engagement provider for the Fund’s Defined Benefit (‘DB’) assets to carry out targeted engagement, including on climate and nature related matters in relation to the Fund’s investments. EOS performs this targeted engagement with companies as a collective on behalf of a number of clients, including the Fund.
As part of its ongoing process, EOS will vote at company general meetings in accordance with the voting policy adopted by the Trustee and as set out in EOS’ published corporate governance principles.
In principle, the Trustee believes that proxy voting activity should not be conducted in isolation but rather as part of a wider engagement strategy. Rather than prescribing specific actions, EOS and the Fund’s external managers are afforded a measure of discretion and flexibility.
The Trustee will regularly monitor the effectiveness of the EOS activities and, where appropriate, will consider how engagement could inform investment decisions. The Trustee monitors material stewardship activity, including where agents take different voting actions at the same company. OPAM is responsible for monitoring EOS to ensure that engagement activities and outcomes are aligned with the Trustee’s climate-related objectives.
Specifically in relation to Fund investments, the Trustee has a general policy of no direct self-investment in shares or bonds issued by Barclays Bank PLC or associated companies.
The Trustee recognises that stewardship and active ownership principles apply across all the Fund’s investments. In selecting investment managers, the managers’ policy on and approach to stewardship is an important factor in the process, with expectations tailored according to the different asset classes and the investment style of each manager.
The Trustee hires appropriately skilled managers and has set clear expectations against which they are assessed and where deficiencies or areas for further improvement are identified. The Trustee expects its investment managers to adhere to the principles within the UK Stewardship Code. The Trustee encourages its investment managers to apply the principles of the Code to both UK and overseas holdings where possible. The primary mechanisms for the application of effective stewardship for these holdings are engagement with investee companies and the exercise of voting rights. The Trustee expects its investment managers to pursue both these mechanisms while being mindful of context.
The Trustee recognises the important role of stewardship in mitigating climate related risk and nature related risks and opportunities. The Trustee (via OPAM) will hold its fund managers and service providers to account for their delivery in this regard and expects them to incorporate climate and nature related risks and opportunities into their investment processes.
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Exclusion Policy
The Trustee adopts a principles-based approach to ESG matters and supports internationally recognised norms of corporate practice. The Fund’s exclusion policy is informed by international conventions on controversial weapons particularly the Convention on Cluster Munitions, the International Convention on the Prohibition of the use of stockpiling, production and transfer of Anti-Personnel Mines, guidance from the United Nations and other global regulations that advocate ESG principles. The Trustee requires underlying asset managers to avoid investing in companies directly involved in the production or sale of cluster weapons, anti-personnel landmines or chemical and biological weapons.
In selecting investment managers, their policy on and approach to ESG issues and exclusions is an important factor in the process. The Fund’s exclusion policy applies to all Public Equity and Fixed Income investments although implementation expectations are tailored according to the different asset classes and the investment style of the manager in question. Screening will be carried out by the underlying managers and exclusions applied where there is evidence of non-compliance with treaties or legal bans on controversial weapons. The Trustee requires current and future fund managers to implement the Fund’s exclusion policy in accordance with their own exclusion approaches. This is the most practical and effective way of implementation. The Fund has very diverse asset allocation with multiple external managers across different asset classes and there are likely to be immaterial deviations in application of the policy. Each of the Fund’s Public Equity and Fixed Income managers operates its own exclusion policy on controversial weapons and may have made slightly different decisions on which securities to exclude, depending on the manager’s investment universe or information from third-party data providers. The Fund will hold the underlying investment managers to account on the implementation of their individual policies and require that they review their exclusion lists periodically.
The Fund’s DB assets are also screened by EOS on a quarterly basis to identify those companies creating an immediate risk to the portfolio through involvement in activities and behaviours that violate the relevant English law, guidance from the UK government and the UN Global Compact Principles. Where a company’s activities are found to conflict with the above, this will be reported by EOS at Federated Hermes and may result in a decision to engage with the company or in a decision to divest from the company.
The Fund’s exclusion policy is reviewed on a periodic basis to ensure alignment with regulations and best practice.
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Defined Contribution (DC) arrangements
The DC assets held within both Sections of the Fund are subject to the same guiding principles and investment activities as described above. In addition, the Trustee has provided an environmentally responsible investment option, the Sustainable Equity Fund, which members can choose as part of the self-select fund range. Members are provided with a fact sheet describing the strategies of the underlying manager and information on performance versus an appropriate benchmark. The Fund’s environmentally responsible DC investment option is reviewed on an annual basis and the manager’s approach to ESG factors and stewardship is discussed at the manager update meetings. For the Sustainable Equity Fund, the manager is expected to maintain its stated mandate regarding consideration of ESG criteria in investment analysis and active ownership.
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Conflicts of interest
The Trustee has an appropriate policy on managing conflicts of interest. The Trustee maintains a register of Trustee Directors’ interests which could give rise to a conflict of interest. The Conflicts Register is considered at each Trustee Board meeting.
OPAM maintains a separate register on managing conflicts of interest, which records any identified conflicts and how they are managed. Activities which may give rise to a conflict are documented in the register. OPAM identifies and manages potential conflicts arising from stewardship activities, such as proxy voting or fund management, in line with its established processes.
In addition, as part of the supplier’s review process, OPAM will review each investment manager’s conflicts of interest policy and consider whether the policy includes: an explanation of how they act in the best interests of the Trustee; how conflicts of interest are identified; and the process followed when a conflict of interest is seen to exist. The same approach is applied to the conflicts of interest policy and approach of EOS.
Specifically in relation to Fund investments, the Trustee has a general policy of no direct self-investment in Barclays Bank PLC or associated companies.
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Communication and reporting
The Trustee will make any appropriate disclosures on how it implements this policy and on its RI activities in general in its Annual Report and Accounts, which is available to members of the Fund on ePA, the pensions website.
The Trustee will disclose the outcome of its climate-related processes in an annual Task Force on Climate-Related Financial Disclosures (‘TCFD’) report.
The Trustee expects and encourages investment managers to disclose publicly their RI policy and stewardship activities (including voting records where appropriate) in an appropriate format.