The Trustee believes that environmental, social, economic and governance (ESG) performance are fundamental to a company’s success and thereby its long-term financial returns. The Trustee also believes that the goal of any company should be to produce sustainable long-term financial value, which will be helped by having long term owners to whom the company is accountable and by having owners who are clear about their expectations.
The Trustee wishes to be invested in companies and other assets that are able to demonstrate that they embrace these objectives.
To help the Trustee with their objectives they have adopted the UN Global Compact Principles as its Responsible Ownership framework for the SCPF and has also signed up to the UN Principles for Responsible Investment (UNPRI) as an investment management framework for giving consideration to environmental, social and corporate governance issues.
You can read more about the approach taken by the Trustee to ensure that its ownership of relevant assets is carried out in a responsible manner in its Responsible Ownership Policy.
The Trustee reflects ESG considerations, including financial risk from climate change, in a manner which is consistent with the Trustee’s investment objectives, legal duties and other relevant commitments. Where the Trustee believes it is appropriate, this includes embedding certain ESG factors or considerations into the relevant investment benchmark.
You can read more on how the Trustee integrates ESG into its investment objectives in the Statement of Investment Principles.
In respect of climate change, the Trustee’s policy is to operate the SCPF in a manner that supports the most ambitious goal of the Paris Agreement – to limit atmospheric heating to 1.5°C compared to pre-industrial levels. To support this policy the Trustee has set a target of net zero by 2050, or earlier, for the carbon emissions of the entities in which it is invested. The achievement of the net zero target will be carried out in a manner which remains consistent with the Trustee’s fiduciary duties and legal obligations relating to the investment of assets.
You can read more about the approach taken by the Trustee to managing the associated risk to climate change on the Fund in its Climate Change Report.
Each year the Trustee reports on the implementation of its stewardship policy as set out in the Statement of Investment Principles and Responsible Ownership Policy in its annual Engagement Policy Implementation Statement.
The Trustee has appointed EOS at Federated Hermes (EOS) to assist in the implementation of its Responsible Ownership policy by providing voting and engagement services. To read more about what EOS has carried out on behalf of the Trustee please read the latest Annual Voting and Engagement Report.