The UKRF’s Responsible Investment Statement outlines the guiding principles the Trustee has adopted. One of these principles is collaboration:

Collaborative initiatives can be powerful in effecting positive change.

Sharing experience and expertise leads to greater awareness and understanding across the industry. The scale of assets under management by investors taking part in these initiatives will influence and encourage wider adoption of best practice standards in responsible investment. And the greater the advances we make in these areas, the better the sustainable investment outcomes will be for members over the long term.

Here, we look at some of the ways we partner with other organisations, to make the most of the above benefits. As our policy says, we will choose those initiatives we take part in carefully, to focus on those we believe will achieve the most impact.

We appoint expert advisers and fund managers to take on specialist areas of managing the UKRF assets, making day-to-day investment and engagement decisions and acting on our behalf. EOS in particular takes on a key stewardship role, and you can read more about how they extend our collaboration to the companies we invest in here.

Below we focus on how we interact with the wider industry. We set out just some of the groups, initiatives and campaigns that bring the UKRF together with hundreds of other schemes and investors who share our concerns and ambitions.

Principles for Responsible Investment (PRI)

The Principles for Responsible Investment are a great example of this shared ambition. In themselves, the Principles are a set of standards, initially established by investors, rather than a group of organisations. They exist to promote responsible investment and support those who officially take up the standards (PRI ‘signatories’) to bring environmental, social and governance considerations into their investment decisions. Accordingly, the Principles themselves have become the internationally-recognised measure of best practice in this area.

The PRI is truly independent. It encourages investors to use responsible investment to enhance returns and better manage risks, but does not operate for its own profit...

PRI

The PRI also provides a framework for signatories to report their ESG progress. As a result, it has formed a proactive network of nearly 5,000 organisations joining forces to endorse the Principles and go on record with their responsible investment activities. The UKRF has been part of this network since 2015.

Paris Aligned Investment Initiative (PAII)

The Paris Aligned Investment Initiative (PAII) was established in May 2019 by the Institutional Investors Group on Climate Change (IIGCC) at the request of asset owner members. It now involves over 110 investors representing $33 trillion in assets.

The PAII’s aims include:

• Defining ways to bring investment portfolios in line with the Paris Agreement goals;
• Identifying which approaches lead to best practice investment standards;
• Testing these approaches with ‘real world’ investments;
• Helping investors commit to net zero emissions by 2050; and
• Supporting these efforts when any challenges arise.

One example of this support is the Stewardship Toolkit, developed from the IIGCC’s Net Zero Investment Framework, which recommends actions and approaches to help investors reach net zero before 2050. We are using this guidance, and you can read about the UKRF’s own net zero ambition here.

Accounting for Sustainability (A4S)

Our aim is to make sustainable decision-making business as usual.

A4S

A4S includes a number of collaborative networks which place open dialogue and knowledge sharing at the centre of their activities. The Trustee belongs to the Asset Owners Network, whose members are jointly working towards reforming financial systems to support the Paris Agreement (and wider United Nations (UN) sustainability goals). The network discusses the latest ESG issues and then commits to following up these meetings with measurable actions.

One of these initiatives we have signed up to is the Pension Fund Chair Net Zero Statement of Support, which unites pension scheme trustee chairs in committing to net zero ambition targets. It is a declaration of intent, and encouragement for other schemes to follow suit.