Summary of responses to the PRI reporting and assessment tool 2008

BT Pension Scheme

Organisational Overview
1. What were your organisation's total assets under management as of 31 December 2007 (in millions)?39684
Please select currencyBritish pound (GBP)
1a. If 'Other' was selected, please specify the other currency hereNo Answer
2. What category would best describe your organisation?Pension or superannuation or retirement or provident fund or plan
3. What proportion (in %) of your fund is defined benefit and what proportion (in %) is defined contribution? (please only answer this question if you answered  Pension or superannuation or retirement or provident fund or plan to Q2)
Defined benefit100
Defined contribution0
4. Please provide an overview of your asset mix as of 31 December 2007 (in %):
Listed equity (developed market, active)6.3
Listed equity (developed market, passive)35.9
Listed equity (emerging market, active)2.6
Listed equity (emerging market, passive)0
Fixed income - developed markets30.3
Fixed income - emerging markets0
Real estate or property10.5
Private equity2.3
Hedge fund4
Infrastructure0
Currency0
Commodities3
Cash4.4
Other (Please specify): Special projects 0.7
5. Please indicate what percentage of your assets are managed internally and what percentage are managed externally (in %):
 
Internal
External
Listed equity (developed market, active)1981
Listed equity (developed market, passive)0100
Listed equity (emerging market, active)1000
Listed equity (emerging market, passive)00
Fixed income - developed markets1000
Fixed income - emerging markets00
Real estate or property1000
Private equity1000
Hedge fund57.542.5
Infrastructure00
Currency00
Commodities1000
Cash1000
Other (Please specify): Special projects 1000
Principle 1
7. Do you have a formal investment policy statement that makes specific reference to the integration of responsible investment (RI) or environmental, social and governance (ESG) issues within investment decision making and ownership practices?Yes, it is integrated into a broader investment policy and there is an independent RI/ESG policy
9. In what year were RI/ESG issues first formally addressed in a policy statement (integrated or independent)?2002
10. Has your statement that makes specific reference to the integration of RI or ESG issues been disclosed publicly?Yes
11. Please indicate how this statement that makes specific reference to the integration of RI or ESG issues can be obtained (a URL would be sufficient):http://www.btpensions.net/BTPS/scheme_details/responsible_investment.htm http://www.hermes.co.uk/pdf/corporate_governance/Hermes_Principles.pdf
12. For what percentage of your internal assets under management do you integrate RI/ESG issues into your internal investment decision-making processes? (in %)
Listed equity (developed market, active)100
Listed equity (emerging market, active)100
Fixed income - developed markets100
Real estate or property100
Private equity0
Hedge fund100
Commodities0
Cash0
Special projects0
13. To what extent have you integrated RI/ESG issues into your internal investment decision-making processes?
Listed equity (developed market, active)To a large extent
Listed equity (emerging market, active)To a large extent
Fixed income - developed marketsTo a large extent
Real estate or propertyTo a large extent
Private equityNot at all
Hedge fundTo a moderate extent
CommoditiesNot at all
Special projectsNot at all
14. For what percentage of your external assets under management are RI/ESG issues integrated into the investment decision-making processes of your external investment managers? (in %)
Listed equity (developed market, active)0
Listed equity (developed market, passive)0
Hedge fund0
15. To what extent have RI/ESG issues been integrated into the investment decision-making processes of your external investment managers?
Listed equity (developed market, active)Not at all
Listed equity (developed market, passive)Not at all
Hedge fundNot at all
16. What proportion of your assets involve screening out or excluding stocks or sectors based on ethical (rather than long-term financial) criteria? (in %)
17. Do you have any staff dedicated to RI/ESG issue analysis and/or implementation?
 
Dedicated
Combined full-time equivalents
Investment analyst05
Research analyst05
RI/ESG issue policy advisor20
(proxy) Voting specialist200
Engagement specialist350
Portfolio manager01
Other (Please specify):00
18. Which Board committee or other executive body has overall responsibility for RI/ESG issues?The Trustee Board
19. Do you assess the capabilities of internal investment staff to incorporate RI/ESG issues?Yes
20. Do you assess the capabilities of external investment managers to incorporate RI/ESG issues?Planning to in 2008
21. Approximately what percentage of your internal non-ESG-specialist investment management staff received RI/ESG training in 2007? (in %)100
22. What forms of RI/ESG training or awareness raising have been invested in, encouraged or provided for internal staff (investment and other)?Informal internal training,Formal internal training,Conferences,Regular briefings on key issues
23. Did you support the development of nonproprietary RI/ESG issue-related tools, metrics, analysis or academic research in 2007?To a large extent
24. Please indicate how the results of nonproprietary RI/ESG issue-related tools, metrics, analysis or academic research development you supported can be obtained if they have been disclosed publicly (a URL would be sufficient):EAI membership. Hermes, our executive investment arm, undertakes this work for the fund, with academics, Carbon Trust, specialist research providers, through EAI (for which it provides the Deputy Chair) and directly with sell side brokers. The results are included in some of the output of the various parties listed above.
25. Have you advocated/supported/ encouraged/participated in RI/ESG issue-related industry-wide training for investment professionals during 2007?Sponsored industry events,Advocated RI/ESG coverage in professional training programs (CFA, MBA, etc.),Spoke at or attended conferences,Had dialogue or exchanges with peers,Instructed at universities or colleges,Other (please specify): 'sponsoring and hosting an IIGCC event'
26. What was your most significant achievement in 2007 in relation to your implementation of Principle 1?Getting buy-in from our internal fund managers
27. What was your biggest barrier in 2007 with relation to your implementation of Principle 1?Getting buy-in from our external fund managers
28. Please add any overall comments and clarifications related to Principle 1 here.Enter text response here.
Principle 2
29. To what extent did you employ the following approaches in your 2007 active ownership strategy for listed equities?
(Proxy) votingTo a large extent
Direct engagement conducted privatelyTo a large extent
Direct engagement conducted publiclyTo a large extent
Collaborative engagementTo a large extent
Filing shareholder resolutionsTo a small extent
Co-filing shareholder resolutionsTo a small extent
Other (Please specify):Not applicable
30. To what extent did you employ the following approaches in your 2007 active ownership strategy for all asset classes other than listed equity?
(Proxy) votingTo a small extent
Direct engagement conducted privatelyTo a small extent
Direct engagement conducted publiclyNot at all
Collaborative engagementPlanning to in 2008
Other (Please specify):Not at all
31. Do you have a (proxy) voting policy?Yes - disclosed publicly
32. To what extent does your (proxy) voting policy direct action on ESG issues? For each issue, please indicate the extent of direction.
EnvironmentalTo a moderate extent
SocialTo a moderate extent
GovernanceTo a large extent
33. Does your (proxy) voting policy apply to all voting regions (where possible)?Yes
34. Please indicate how your (proxy) voting policy can be obtained (a URL would be sufficient):www.hermes.co.uk
35. Do you ensure that voting is done in accordance with your (proxy) voting policy?Yes for all
36. What percentage of total votes cast were against management? (in %)0.55
37. What percentage of shareholder resolutions relating to environmental, social or governance issues was supported? (in %)
Environmental35
Social30
Governance60
39. How many shareholder resolutions related to RI/ESG issues did you participate in during 2007?
As lead filer4
As co-filer1
Planning to be lead filer in 20084
Planning to be co-filer in 20085
40. How were portfolio companies engaged with in 2007? Please check all that apply.Internal staff engaged portfolio companies directly,Internal staff engaged portfolio companies collaboratively
42. Do you systematically ask your external investment managers to bring RI/ESG issue-related engagement opportunities to you?To a moderate extent
43. How many portfolio companies did you engage directly/were engaged on your behalf on ESG issues in 2007?
 
Extensive engagement
Moderate engagement
Basic engagement
Environmental830150
Social621146
Governance41149891
44. What RI/ESG-related issues were addressed in your shareowner engagement initiatives? Please check all that apply.Activities in conflict zones,Benefits and compensation,Bribery/corruption,Climate change,Environment,Governance,HIV/AIDS,Health,Health and safety,Human rights,Labour issues,Nanotechnology / novel technology,Other (please specify): 'strategy, capital structure, risk management, access to medicines, nominations process, audit'
45. How were RI/ESG issue-related engagement targets and topics identified? Please check all that apply.Client directive,Sector exposure,Risk profile,Focus issue,Ad hoc/reactive,NGO or union campaign,Other (please specify): 'Screening and analysis by Hermes EOS'
46. Do you set RI/ESG issue-related engagement objectives and attempt to evaluate success?To a large extent
47. Have you sought evidence relating to the effectiveness of your active ownership strategy? Please check all that apply.Governance practices changed,(Written) commitment to improve a particular ESG issue,Improved disclosure,Collaborative work with a company on a specific ESG issue,Other evidence of improvement in investee company RI/ESG performance due to our activities,Shareholder resolutions withdrawn after successful negotiations with portfolio companies,Satisfactory percentages of (proxy) votes in favour of filed or co-filed shareowner resolutions,Impact on share price
48. What was your most significant achievement in 2007 in relation to your implementation of Principle 2?Gaining the European Court of Justice's agreement to force the amendment of an article of the Italian civil code. This will prevent political authorities from exerting disproportionate influence over Italian listed companies and was the end result of a three year engagement.
49. What was your biggest barrier in 2007 with relation to your implementation of Principle 2?We encountered no significant barriers in this regard.
50. Please add any overall comments and clarifications related to Principle 2 here.Teh design of this questionnaire makes it difficult to provide a proper description of our engagement work, which is iterative, multi-faceted and focussed on value-enhancing change.
Principle 3
51. Have you asked that investee companies (or other investment entities) produce standardized reporting on their RI/ESG issue policies, practices or performance (within annual financial reports or other formats)?To a moderate extent
52. What format of standardized reporting on RI/ESG issue policies, practices or performance have you requested?Integrated with regular financial reports,Carbon Disclosure Project (CDP)
53. Have you provided feedback to investee companies (or other investment entities) on their reporting on RI/ESG issues?To a moderate extent
54. Have you sought information from companies regarding their adoption of/adherence to norms, standards, codes of conduct or international initiatives related to RI/ESG issues?
AdoptionTo a large extent
AdherenceTo a large extent
55. Which norms, standards, codes of conduct or international initiatives related to RI/ESG issues have you sought information about from companies, with regard to their adoption of/adherence to?UN Global Compact,International Labour Organization standards,OECD guidelines for multinational enterprises,Universal Declaration of Human Rights
56. What was your most significant achievement in 2007 in relation to your implementation of Principle 3?We made significant progress in improving disclosure on carbon-related risk through direct engagement with companies and our participation in IIGCC.
57. What was your biggest barrier in 2007 with relation to your implementation of Principle 3?We have encountered no significant barriers in this regard.
58. Please add any overall comments and clarifications related to Principle 3 here.Enter text response here.
Principle 4
59. Are you considering RI/ESG requirements when searching for and selecting the following?
External investment managerYes
Investment consultantYes
Proxy votingYes
Engagement overlayYes
Investment researchYes
Internal operations (for example, purchasing, travel, office space etc.)Yes
Other (Please specify):Not applicable
60. Have you linked the following to performance on RI/ESG issues?
Investment monitoringYes
Incentive structure (internal investments)Yes
Incentive structure (external investments)No
Contractual relationships with external investment managersNo
61. Are the default pension funds or retirement plans offered to your employees also signatories to the PRI?No
62. To what extent do you encourage your service providers to become PRI signatories?To a large extent
64. To what extent do you encourage peer organisations to become PRI signatories?To a large extent
65. Do you have evidence that you have played a role in the improved integration of RI/ESG issues by external investment managers?Planning to in 2008
67. Have you revisited any relationships with service providers in light of RI/ESG issue-related capabilities?Yes
68. Have you engaged in dialogue, lobbying or initiatives pertaining to government policy and/or industry regulations (for example, stock exchanges, accounting standards) related to RI/ESG issues in 2007?To a large extent
69. What was your most significant achievement in 2007 in relation to your implementation of Principle 4?Obtaining a grant from the Carbon Trust to sponsor a PRI collaborative engagement on carbon risk
70. What was your biggest barrier in 2007 with relation to your implementation of Principle 4?We encountered no significant barriers in this regard
71. Please add any overall comments and clarifications related to Principle 4 here.Enter text response here.
Principle 5
72. Did you use the PRI Engagement Clearinghouse in 2007?Both used and posted to it
73. Did your use of the clearinghouse result in subsequent action or collaboration with other signatories?Yes
74. Please elaborate on how the PRI Engagement Clearinghouse could be made more useful:Better co-ordination by PRI executive
75. To what extent do you participate in the following RI/ESG issue-related collaborative engagement initiatives and/or industry associations? For those not listed, please use the "other" field:Carbon Disclosure Project,Council of Institutional Investors (CII),Enhanced Analytics Initiative (full member) (EAI),Extractive Industries Transparency Initiative (EITI),Institutional Investors Group on Climate Change (IIGCC),International Corporate Governance Network (ICGN),Investor Network on Climate Risk (INCR),Marathon Club,Regional social investment organisation (for example SIF or UKSIF),United Nations Environmental Program Finance Initiative (UNEP FI)
76. Please indicate the three RI/ESG issue-related collaborative engagement initiatives and/or industry associations that you participated in most extensively and indicate how you did so:
Enhanced Analytics Initiative (full member) (EAI)Hermes, our executive arm, provides the deputy chair
Institutional Investors Group on Climate Change (IIGCC)Hermes, our executive arm, is represented on the steering committee
International Corporate Governance Network (ICGN)Hermes, our executive arm, was an organiser of the conference and sits on three of its standing committees
77. What was your most significant achievement in 2007 in relation to your implementation of Principle 5?Taking foward several extensive and effective engagements through the PRI clearinghouse.
78. What was your biggest barrier in 2007 with relation to your implementation of Principle 5?We encountered no significant barriers in this regard
79. Please add any overall comments and clarifications related to Principle 5 here.Enter text response here.
Principle 6
80. Have you disclosed how RI/ESG issues are integrated into your investment processes?Yes - to clients or beneficiaries and the public
81. Please indicated how this disclosure of how RI/ESG issues are integrated into your investment processes can be obtained (a URL would be sufficient):http://www.btpensions.net/BTPS/scheme_details/responsible_investment.htm
82. To what extent do you disclose your annual (proxy) voting record?Disclose votes and guidance explaining votes
83. Please indicated how your (proxy) voting record can be obtained (a URL would be sufficient):http://www.hermes.co.uk/corporate_governance/voting_disclosure.htm
84. Do you systematically report (privately and/or publicly) on your RI/ESG issue-related engagement activities, results and progress?To a large extent
85. Please indicate how your reporting on RI/ESG issue-related engagement activities, results and progress can be obtained (if it is publicly available, a URL would be sufficient):http://www.hermes.co.uk/corporate_governance/voting_disclosure.htm
86. Did you communicate on RI/ESG issues and the PRI to beneficiaries or plan participants in 2007?To a large extent
87. Please indicate how your communication on RI/ESG issues and the PRI to beneficiaries or plan participants can be obtained (if it is publicly available, a URL would be sufficient):annual report meeting with unions
88. Are you undertaking any additional efforts to raise awareness of the PRI and RI/ESG issues amongst stakeholders?Planning to in 2008
89. What evidence do you have of the impact on external investment manager practices? Please check those that apply.Engagement,Proxy voting,Improved communications on ESG,Provision of new research
90. Have you sought to determine what impact your overall RI/ESG issue-related efforts (voting and engagement, investment decision making, disclosure, etc.) have had on corporate behavior or performance?To a large extent
91. Have you sought to determine what impact your RI/ESG issue-related approach has had on the performance of your portfolio?To a large extent
92. Have you sought to determine what impact your RI/ESG issue-related efforts, requests and guidance have had on the consideration of RI/ESG issues by your external service providers excluding external investment managers (for example: research providers, consultants, etc.)?To a large extent
93. Do you report on progress and/or achievements relating to the PRI or RI, and how would you like to publish your response to this assessment?Please automatically publish our responses to the reporting and assessment tool in full on the PRI website,We publicly reported on our PRI or RI achievements in 2007 (outside of publishing part or all of this assessment)
94. What was your most significant achievement in 2007 in relation to your implementation of Principle 6?Publishing full voting record
95. What was your biggest barrier in 2007 with relation to your implementation of Principle 6?We have encountered no significant barriers in this regard
96. Please add any overall comments and clarifications related to Principle 6 here.Enter text response here.
Emerging Markets
97. To what extent have you actively thought about how to integrate RI/ESG issues within investment decision making and ownership practices with regards to emerging markets investments?To a large extent
98. Please describe your activities with regards to integrating RI/ESG issues within investment decision making and ownership practices with regards to emerging markets investments.This is present within the voting, engagement and public policy / best practice work undertaken by Hermes EOS on our behalf
99. To what extent do you believe the integration of ESG issues in emerging markets is as relevant as the integration of ESG issues in other markets?To the same extent
100. To what extent did you employ the following approaches in your 2007 active ownership strategy in emerging markets?
(Proxy) votingTo a large extent
Direct engagement conducted privatelyTo a large extent
Direct engagement conducted publiclyTo a small extent
Collaborative engagementTo a large extent
Filing shareholder resolutionsNot at all
Co-filing shareholder resolutionsNot at all
Other (Please specify): policy / best practice engagementTo a moderate extent
101. To what extent have you developed a comprehensive RI/ESG engagement capability regarding business activities in emerging markets?To a large extent
102. Please list the three most often addressed RI/ESG-related issues in your shareholder engagement initiatives in emerging markets?
1.Accountability
2.Human rights
3.Bribery / corruption
103. Have you sought information from companies regarding their adoption of/adherence to norms, standards, codes of conduct or international initiatives related to RI/ESG issues in emerging markets?
AdoptionTo a large extent
AdherenceTo a large extent
104. Do you take RI/ESG considerations into account when selecting and approving emerging markets external investment managers?Planning to in 2008
105. Do your consultants factor RI/ESG issues into their short listing of emerging markets external investment managers?Planning to in 2008
106. Do you have evidence that you have played a role in the improved integration of RI/ESG issues by external investment managers investing in emerging markets?Not at all
107. To what extent have you worked together with other investors to improve the effectiveness of implementing the PRI in emerging markets?To a moderate extent
108. Are you undertaking any additional efforts to raise awareness of RI/ESG issues in emerging markets?Planning to in 2008
109. Have you sought to determine what impact your RI/ESG issue-related efforts (voting and engagement, investment decision making, disclosure, etc.) have had on corporate behaviour or performance in emerging markets?To a large extent
110. Please add any overall comments and clarifications related to the PRI in emerging markets here.No Answer
111. What is your top PRI-related goal/priority for emerging markets in 2008?Expansion of our activities into several African countries
Closing Comments
112. Why did your organisation join the PRI?To promote acceptance and incorporaion of ESG into mainstream investment. To work with other collaboratively on company-specific and policy engagement.
113. Please describe the benefits you have enjoyed as a result of signing the PRI:Participation in collaborative engagements through the clearinghouse
114. To what extent do you believe the PRI has succeeded in changing investor behaviour and/or raising awareness or capacity on RI/ESG issues? Do you have any examples you could share?The PRI has been successful in raising awareness as evidenced by the growing number of signatories
115. What are the top three activities the PRI Secretariat could undertake to enhance and encourage further implementation of the PRI by current and prospective signatories?
1.Better co-ordination of clearinghouse engagements
2.A greater recognition of the complexities and sensitivities involved in direct corporate engagement
3.More consideration and advice around the implementation of PRi in different asset classes
116. What are your top three PRI-related goals/priorities for 2008?
1.Consider what activities may be appropriate in different assets classes
2.Meet and share experiences with other signatories
3.Consider means of communicating activities to beneficiaries
117. Please rank the six principles from most difficult to implement to least difficult to implement:
Most difficult
1
Principle 1
2Principle 6
3Principle 3
4Principle 4
5Principle 5
Least difficult
6
Principle 2