Summary of responses to the PRI reporting and assessment tool 2008

Environment Agency Pension Fund

Organisational Overview
1. What were your organisation's total assets under management as of 31 December 2007 (in millions)?1604
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)19
Listed equity (developed market, passive)41
Listed equity (emerging market, active)5
Listed equity (emerging market, passive)0
Fixed income - developed markets23
Fixed income - emerging markets0
Real estate or property5
Private equity3
Hedge fund0
Infrastructure0
Currency3
Commodities0
Cash1
Other (Please specify): 0
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)0100
Listed equity (developed market, passive)0100
Listed equity (emerging market, active)0100
Listed equity (emerging market, passive)00
Fixed income - developed markets0100
Fixed income - emerging markets00
Real estate or property0100
Private equity0100
Hedge fund00
Infrastructure00
Currency0100
Commodities00
Cash0100
Other (Please specify): 00
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
8. Do you have a 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?
9. In what year were RI/ESG issues first formally addressed in a policy statement (integrated or independent)?2000
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.environment-agency.gov.uk/pensions then select publications
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)
Listed equity (developed market, passive)
Listed equity (emerging market, active)
Listed equity (emerging market, passive)
Fixed income - developed markets
Fixed income - emerging markets
Real estate or property
Private equity
Hedge fund
Infrastructure
Currency
Commodities
Cash
{inst1}
13. To what extent have you integrated RI/ESG issues into your internal investment decision-making processes?
Listed equity (developed market, active)No Answer
Listed equity (developed market, passive)No Answer
Listed equity (emerging market, active)No Answer
Listed equity (emerging market, passive)No Answer
Fixed income - developed marketsNo Answer
Fixed income - emerging marketsNo Answer
Real estate or propertyNo Answer
Private equityNo Answer
Hedge fundNo Answer
InfrastructureNo Answer
CurrencyNo Answer
CommoditiesNo Answer
CashNo Answer
{inst1}No Answer
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)100
Listed equity (developed market, passive)100
Listed equity (emerging market, active)100
Listed equity (emerging market, passive)100
Fixed income - developed markets100
Fixed income - emerging markets
Real estate or property100
Private equity100
Hedge fund
Infrastructure
Currency0
Commodities
Cash0
{inst}
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)To a large extent
Listed equity (developed market, passive)To a large extent
Listed equity (emerging market, active)To a large extent
Listed equity (emerging market, passive)To a large extent
Fixed income - developed marketsTo a moderate extent
Fixed income - emerging marketsTo a moderate extent
Real estate or propertyTo a large extent
Private equityTo a large extent
Hedge fundNo Answer
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 analyst00
Research analyst00.5
RI/ESG issue policy advisor01.5
(proxy) Voting specialist00.5
Engagement specialist00.5
Portfolio manager00
Other (Please specify):00
18. Which Board committee or other executive body has overall responsibility for RI/ESG issues?Pensions Committee
19. Do you assess the capabilities of internal investment staff to incorporate RI/ESG issues?No Answer
20. Do you assess the capabilities of external investment managers to incorporate RI/ESG issues?Yes
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,Professional programs,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):http://www.environment-agency.gov.uk/pensions and http://www.environment-agency.gov.uk/environmentalfinance
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,Other (please specify): 'research - funded and dessiminated'
26. What was your most significant achievement in 2007 in relation to your implementation of Principle 1?Robeco case study outlining the approach to integrating responsible investment into private equity.
27. What was your biggest barrier in 2007 with relation to your implementation of Principle 1?Information overload. Too much poor information on RI issues being published, not enough original material. This has the potential disengage ESG and non ESG staff.
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 resolutionsNot applicable
Co-filing shareholder resolutionsNot applicable
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 large extent
Direct engagement conducted privatelyTo a large extent
Direct engagement conducted publiclyTo a large extent
Collaborative engagementTo a large extent
Other (Please specify): case study research To a large extent
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 large extent
SocialTo a moderate extent
GovernanceTo a moderate 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):http://www.environment-agency.gov.uk/commondata/acrobat/corpgovstrat_1741080.pdf
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 %)3
37. What percentage of shareholder resolutions relating to environmental, social or governance issues was supported? (in %)
Environmental78
Social36
Governance36
39. How many shareholder resolutions related to RI/ESG issues did you participate in during 2007?
As lead filer
As co-filer
Planning to be lead filer in 2008
Planning to be co-filer in 2008
40. How were portfolio companies engaged with in 2007? Please check all that apply.Internal staff engaged portfolio companies directly,External investment managers engaged portfolio companies directly,Internal staff engaged portfolio companies collaboratively,External investment managers engaged portfolio companies collaboratively,An external engagement overlay service was employed
42. Do you systematically ask your external investment managers to bring RI/ESG issue-related engagement opportunities to you?To a large 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
Environmental2065700
Social2800
Governance15600
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,Distribution of fair trade products,Environment,Governance,HIV/AIDS,Health,Health and safety,Human rights,Labour issues,Nanotechnology / novel technology,Other (please specify): 'safety'
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
46. Do you set RI/ESG issue-related engagement objectives and attempt to evaluate success?To a moderate 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,Impact on share price
48. What was your most significant achievement in 2007 in relation to your implementation of Principle 2?carbon neutrality and management report
49. What was your biggest barrier in 2007 with relation to your implementation of Principle 2?Transparency and openness from our fund managers as to their engagement activities.
50. Please add any overall comments and clarifications related to Principle 2 here.Enter text response here.
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 large 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),Global Framework for Climate Risk Disclosure
53. Have you provided feedback to investee companies (or other investment entities) on their reporting on RI/ESG issues?To a large 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?Other (please specify): 'defra environmental KPIs'
56. What was your most significant achievement in 2007 in relation to your implementation of Principle 3?environmental disclosures of the FTSE All-share http://publications.environment-agency.gov.uk/pdf/GEHO1007BNGJ-e-e.pdf
57. What was your biggest barrier in 2007 with relation to your implementation of Principle 3?inconsistent reporting on carbon dioxide and other environmental impacts by companies.
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):Yes
60. Have you linked the following to performance on RI/ESG issues?
Investment monitoringYes
Incentive structure (internal investments)Not applicable
Incentive structure (external investments)Yes
Contractual relationships with external investment managersYes
61. Are the default pension funds or retirement plans offered to your employees also signatories to the PRI?Not applicable
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?To a large extent
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?Actively getting new signatories to the UNPRI. We ask whether the a fund manager is an UNPRI signatory during tenders and have evaluate the responses, including those who indicate that it is under active consideration.
70. What was your biggest barrier in 2007 with relation to your implementation of Principle 4?£10,000 donation has been an issue with some of fund managers and service providers.
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:Improved newsletter
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,Extractive Industries Transparency Initiative (EITI),Institutional Investors Group on Climate Change (IIGCC),United Nations Environmental Program Finance Initiative (UNEP FI),Other (please specify): 'Largely producing research in collaboration and supporting consultations'
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:
Other (please specify)
Carbon neutrality and carbon offsetting in the FTSE All-share 2007 Private Equity case study with Robeco
Institutional Investors Group on Climate Change (IIGCC)Carbon disclosure
Extractive Industries Transparency Initiative (EITI)Iron and Steel Engagement
77. What was your most significant achievement in 2007 in relation to your implementation of Principle 5?Private Equity case study on responsible investment as is describes how all the principles have been applied to this asset class - from manager selection, monitoring, engagement, developing tools and techniques for others to use - and disclosure. We are hoping to provide a version suitable for the UNPRI clearing house soon.
78. What was your biggest barrier in 2007 with relation to your implementation of Principle 5?The resource intensity needed to do a good job
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.environment-agency.gov.uk/pensions
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.environment-agency.gov.uk/pensions select voting records
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):We report to our Pensions Committee in detail as to our RI/ESG issue. In outline it is covered in our annual report and accounts - http://www.environment-agency.gov.uk/pensions select publications
86. Did you communicate on RI/ESG issues and the PRI to beneficiaries or plan participants in 2007?To a small 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):We report to our Pensions Committee in detail as to our RI/ESG issue which includes member representatives. In outline it is covered in our annual report and accounts and Fundfare- http://www.environment-agency.gov.uk/pensions select publications
88. Are you undertaking any additional efforts to raise awareness of the PRI and RI/ESG issues amongst stakeholders?To a large extent
89. What evidence do you have of the impact on external investment manager practices? Please check those that apply.Investment policy,Investment decisions,Engagement,Proxy voting,New employment/positions created,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
94. What was your most significant achievement in 2007 in relation to your implementation of Principle 6?Full disclosure of all environmental shareholder resolutions and top holdings
95. What was your biggest barrier in 2007 with relation to your implementation of Principle 6?Resource implications of compiling all the data - especially as the reporting year is different from our own i.e april- march rather than Jan-dec
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.Collaboration with our emerging market manager - SWIP now an UNPRI signatory which in turn are supported by another UNPRI signatory GES.
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 a greater 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): ww Not Applicable
vvvv
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.Environmental Policy
2.Management response to accidents and incidents
3.transparency and disclosure
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?
AdoptionNo Answer
AdherenceNo Answer
104. Do you take RI/ESG considerations into account when selecting and approving emerging markets external investment managers?To a large extent
105. Do your consultants factor RI/ESG issues into their short listing of emerging markets external investment managers?To a moderate extent
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?To a large extent
107. To what extent have you worked together with other investors to improve the effectiveness of implementing the PRI in emerging markets?To a small extent
108. Are you undertaking any additional efforts to raise awareness of RI/ESG issues in emerging markets?To a moderate extent
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 moderate extent
110. Please add any overall comments and clarifications related to the PRI in emerging markets here.There is huge potential to work together to make progress on improving RI in emerging markets - perhaps a sub-group could be formed?
111. What is your top PRI-related goal/priority for emerging markets in 2008?To capture more information on the impact on engagement and more practical examples good practice to promote elsewhere.
Closing Comments
112. Why did your organisation join the PRI?We felt the principles underpinned our investment and ESG philosphy
113. Please describe the benefits you have enjoyed as a result of signing the PRI:Links to other members Reputation
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?UNPRI has made considerable progress on membership - hopefully investor behaviour will follow - largely as a result of not wanting to be left out. We have noticed even the most 'conservative' managers are considering the benefits of membership - albeit slowly.
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.Co-ordinate the generation of list of fund managers and service providers that UNPRI asset owners use who are not signatories and write letters inviting them to join co-signed by all their clients.
2.Find alternatives to £10,000 donation - i.e in kind support of some sort. ESG departments are often not the best funded and this maybe a problem, particularly for smaller boutique managers.
3.Publish lists of mandates won by UNPRI asset managers.
116. What are your top three PRI-related goals/priorities for 2008?
1.Publish PRI progress report
2.Improve our direct and directed engagement with companies on environmental issues.
3.Review and revise polices.
117. Please rank the six principles from most difficult to implement to least difficult to implement:
Most difficult
1
Principle 4
2Principle 3
3Principle 2
4Principle 5
5Principle 6
Least difficult
6
Principle 1