We're pleased to bring you our Statement of Compliance with the UK Stewardship Code covering the year 2020 to 31 March 2021.
Councillor Paul Crossley, Chair of the Pension Committee, said this in recognition of this latest release:
"The Avon Pension Fund has long been an advocate for active stewardship; recognising that positive engagement with companies, policymakers and the investment industry can protect and enhance the value of our assets over the long-term, ultimately for the benefit of our membership. As a Tier 1 signatory to the Financial Reporting Council (FRC) Stewardship Code 2012, it was important to us to continue to adhere to the high standards expected of us by our stakeholders. We welcome the broader scope of the FRC UK Stewardship Code 2020 (the Code), which now covers all assets not just listed equities, and shifts the emphasis from policies and procedures to activities and outcomes, which is ultimately what’s required if we are to effect environmental, social and governance change in the real world.
We support and apply the Code’s definition of stewardship: “Stewardship is the responsible allocation, management and oversight of capital to create long-term value for beneficiaries leading to sustainable benefits for the economy, the environment and society” and hope that the content of this report goes some way to demonstrating how we put this into practice.
During the year, and despite the ongoing challenges presented by the COVID-19 pandemic, we have continued to make progress with respect to our Responsible Investing priorities, most notably climate change. We have seen the carbon intensity of our listed equity portfolio reduce by 22% since last year, have seen capital invested in new and exciting renewable energy projects and have noted, with great pleasure, major steps being taken by some of the world’s largest greenhouse gas emitters to position themselves for the low carbon transition as a direct result of intensive investor engagement.
The Fund is proud to work alongside strategic partners such as Brunel Pensions Partnership (Brunel), the Local Authority Pension Fund Forum and the Institutional Investors Group on Climate Change, recognising the breadth and depth of expertise these groups bring to bear. Collaboration is critical if we are to make genuine progress on the issues that affect us all. Equally, it is very important that we, as a Fund, continue to drive strategy, inform policy and debate and ensure that our members views and our policies are reflected in the work Brunel and our other service providers undertake on our behalf.
Over the past year we have seen a significant increase in contact with our members on environmental, social and governance (ESG) issues and have welcomed the opportunity to share the progress we have made through the development of a dedicated climate change ‘microsite’, printed articles and direct member engagement. We see this report, as well as the other disclosures we have voluntarily adopted such as the Financial Stability Board’s Taskforce on Climate-related Financial Disclosures, as a natural extension to our communications strategy. Next year will see the Fund undertake its first dedicated ESG member survey and a social media launch, which shows a clear demonstration that we take our member’s priorities seriously and are acting accordingly to meet them.
With the progress the Fund has made so far it is essential that we maintain momentum, continue to demonstrate leadership, and use our collective voice as investors to advance policy across all ESG issues at this critical time. Protecting our assets for the benefit of our members, as well as managing the risks and opportunities that come with investing in a sustainable and inclusive way, is an extremely complex task but with a progressive investment strategy and a robust governance framework surrounding it, I am confident that we are taking the steps necessary to deliver on our financial and ESG obligations."
Councillor Paul Crossley, Chair of Pension Committee, Avon Pension Fund
The Statement document can be read here: