Border to Coast Pensions Partnership has held engagement meetings with local water firms Yorkshire and Northumbrian Water in order to flag sewage pollution, water leakage and climate change among others, the LGPS pool said.
The £40.3bn pool has reported “positive” engagement with the water companies over pollution and biodiversity risks as it looks to create local impact.
In its latest quarterly stewardship report, Border to Coast, which is one of the eight Local Government Pension Scheme (LGPS) pools in the UK, engaged with 457 companies over the last quarter of 2023.
Border to Coast is leading engagement with both Yorkshire Water and Northumbrian Water as part of its membership of a collaborative stewardship initiative with the UK water utility sector, coordinated by the Royal London Asset Management.
This comes as those within the LGPS are increasingly looking to generate local impact though investments and stewardship. This follows the publication of the Levelling Up White Paper in which the government set out the ambition for LGPS funds to have of up to 5% of their assets invested in projects which support local areas.
Following a meeting with Yorkshire Water in October 2023, Border to Coast said: “The company’s response has been positive, and Yorkshire Water recently announced that it is bringing forward sewage infrastructure investment in Scarborough and surrounding area, an area our engagement has highlighted as in need.”
Alongside this, the stewardship report highlighted that Northumbrian Water has responded to Border to Coast’s engagement “with further disclosure on our priorities, which is currently being assessed”.
Private equity investors in water firms have recently faced challenges. The Universities Superannuation Scheme (USS) announced at the beginning of this year that it had drastically scaled back its holdings in Thames Water.
However, the financial outlook for Yorkshire Water and Yorkshire Water is less challenging, both firms have last year increased their dividends to shareholders but continue to face public pressures over their disposal of sewage in rivers.
Border to Coast’s positions in the water companies are through its corporate fixed income strategy, a spokesperson for the pool confirmed to Room151.
EasyJet engagement
The report also detailed other companies Border to Coast engaged with during the last quarter of 2023, including British low-cost airline EasyJet.
Border to Coast, which is part of the IIGCC’s Net Zero Engagement Initiative, is co-leading engagement with the airline alongside shareholders Ninety-One, Phoenix Group and Strathclyde Pension Fund.
Following a meeting with EasyJet to discuss its emission reduction targets and decarbonisation strategy, Border to Coast stated that the company’s response was “satisfactory, with a well-below 2 degrees aligned Science Based Targets initiative target and comprehensive transition plan”.
“Further disclosure has been requested on the feedstock and sustainability of sustainable aviation fuels, and on the contributions of transition measures to meeting its targets,” the report added.
In total, Border to Coast had voted at 126 meetings in last quarter of 2023, compromising over 900 agenda items. The LGPS pool cast at least one vote against the recommendations of management at 38% of meetings.
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