AUM in Action

Border to Coast Strengthens ESG Stance

UK pensions pool Border to Coast Pensions Partnership has solidified its responsible investment (RI) policies to further develop and embed climate and ESG risk management. The update is part of a broader annual review, and has been carried out in conjunction with 11 partner funds, which together represent a million members, 2,700 employees and £58 billion (US$73.32 billion) in investments. The strengthened RI policies include a commitment to generally vote in favour of shareholder resolutions aligned with the objectives of the Paris Agreement, taking a “comply-or-explain” approach and publicly disclosing its rationale if voting against.  In addition, Border to Coast will not invest in organisations where thermal coal power generation represents more than 50% of revenue for companies listed in developed markets, and 70% for companies in emerging markets. The Local Government Pension Scheme (LGPS) pool will also vote against the chair of the board where a company engaged by Climate Action 100+ has failed indicators of its net-zero benchmark covering emission reduction targets, and against the chair of UK nomination committees if the board is composed of less than 40% female directors. Finally, an exclusion for controversial weapons has been broadened to cover landmines, biological and chemical weapons, covering international treaties and conventions that the UK has either ratified or to which it is a state party. “As long-term investors, we believe it’s critical that the firms we invest in on behalf of our partner funds are appropriately managing the risks of climate change and are adopting robust climate change targets and policies,” said Jane Firth, Head of Responsible Investment at Border to Coast. “We believe that voting is essential to managing climate risk and an important means of influencing company targets and policies…Our new exclusion policy covering coal power generation reflects Border to Coast’s support for a Just Transition, recognising that countries have differing transition timelines and economic dependencies on coal.”

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