Border to Coast LGPS pool has appointed an international asset manager to encourage ethical business practices at investee companies.
The pool, which will invest £43bn of assets belonging to 12 local government pension scheme funds, has selected Robeco to perform its voting and engagement services.
Robeco will vote at shareholder meetings on behalf of the pool and engage with listed company managers to encourage the adoption of environmental, social and governance (ESG) practices.
Rachel Elwell, chief executive of Border to Coast, said: “We are strong advocates of responsible investment and holding companies to account on environmental, social and governance issues.
“This is central to Border to Coast’s corporate and investment ethos, and a key part of delivering our partner funds’ objectives.”
Robeco, which currently votes at about 5,000 shareholder meetings each year, said it focuses on issues including remuneration, mergers and acquisitions, significant holdings, companies under engagement and environmental, social and governance issues.
The company uses a proprietary assessment framework and will also analyse voting, gather input from investment managers and review sustainability disclosures, annual reports and news items, it added.
Border to Coast has already signed up to sustainable investment initiatives such as Climate Action 100+, the Task Force on Climate-related Financial Disclosures and the 30% Club Investor Group.
Peter Walsh, head of Robeco UK, said: “Winning this mandate builds on our solid traction in the local government pension fund sector and will add further momentum to our active ownership team and strengthen our local sustainability investing profile.”
Based in Leeds, the pool will invest the assets of the Bedfordshire, Cumbria, Durham, East Riding, Lincolnshire, Northumberland, North Yorkshire, Surrey, South Yorkshire, Teesside, Tyne and Wear and Warwickshire LGPS pension funds.
In June the government issued draft regulations reassuring trustees that they are permitted to take environmental, social or governance (ESG) into consideration in their investment decisions.
The Department for Work and Pensions said the consultation was aimed at clearing up confusion over the extent to which pension schemes can allow ESG concerns, including climate change, to influence investment decisions.
