Merseyside Pension Fund is committed to a policy of responsible investment. The Fund’s responsible investment policy has three components: exercise of voting rights; engagement with companies on environmental, social and governance (ESG) issues & collaboration with like-minded investors.
The Fund employs PIRC Ltd to provide comprehensive company research and execute a global voting strategy.
The Fund considers that a strategy of engagement with companies, rather than screening companies from the portfolio on ESG grounds, is more compatible with its fiduciary duties and is ultimately a more effective method of responsible investment. An engaged investor retains ownership influence over those companies with which it seeks to engage.
Active involvement in the work of the Local Authority Pension Fund Forum (LAPFF) and the Institutional Investors Group on Climate Change (IIGCC) is fundamental to pursuing the Fund’s engagement policy. LAPFF is one of the UK’s leading institutional shareholder groups, representing the engaged ownership of approximately £80 billion combined assets.
LAPFF has a wide-ranging engagement work-plan, covering an assortment of corporate governance and corporate social responsibility issues, which over the past year has included a response to the financial crisis, involving engagement with UK banks and policy-makers.
Climate change is arguably the most important issue we all face over the long-term and IIGCC seeks to encourage a pro-active approach to the issue among institutional investors. The Group unites asset owners with investment managers and seeks to support the development of effective public policy (link to Investor Statement), as well as encouraging companies to improve their disclosure and performance on climate change.
It has published over the past year influential policy papers on enhancing the effectiveness of carbon markets and developing financing mechanisms to encourage investment flows into renewable energy.