Accordingly, NILGOSC believes that engagement with companies is a key part of any responsible investment strategy. NILGOSC requires its active investment managers to monitor best practice in this area and ensure that ESG considerations, where relevant, are taken into account in the investment management process. All active fund managers are instructed to engage, on NILGOSC’s behalf, with those companies where ESG policies fall short of acceptable standards and where this is likely to have a detrimental effect on the long-term value of the company.
Responsible ownership and engagement
NILGOSC also engages directly the companies in which it invests. In cases where NILGOSC intends to, or has, voted against resolutions at a UK or European-listed company’s Annual General Meeting (AGM), NILGOSC issues an engagement letter outlining its rationale for doing so. The practice of writing to UK-listed companies in which it held shares commenced in 2010, and in January 2015, coverage expanded to European-listed companies as well. Where possible, NILGOSC aims to write to these companies in advance of the AGMs to make engagement as effective as possible.
Collaborative engagement
NILGOSC also believes that collaborative engagement is a key part of any responsible investment strategy and will seek to work collectively with other likeminded investors in order to maximise its influence on individual companies. NILGOSC is aware that it is just a small voice, and one way to amplify that voice is to collaborate with other likeminded investors and groups:
| Signatory to: | Description |
|---|---|
| UN Principles of Responsible Investment (PRI) (Since 2007) | An international network of investors working together to implement six aspirational ESG principles. |
| CDP (formerly the Carbon Disclosure Project) (Since 2007) | A not-for-profit charity that runs the global disclosure system for reporting and managing environmental impacts. |
| Climate Action 100+ (Founder supporter signatory) | An investor-led initiative focusing on 167 of the world’s largest greenhouse gas emitters. |
| Member/Supporter of: | Description |
|---|---|
| Institutional Investors Group on Climate Change (IIGCC) | European membership body for investor collaboration on Climate Change. |
| The Asset Owner Council (AOC) (inaugural member) | Collective group of asset owners working together to promote responsible investment and high standards of stewardship. Formed in 2024 following the merger of the UK Pension Scheme Responsible Investment Roundtable and the Occupational Pensions Stewardship Council (OPSC), both of which NILGOSC was a member of. |
| Task Force on Climate-related Financial Disclosures (TCFD) (Since June 2020) | A (now disbanded) working group tasked with creating a set of comparable and consistent disclosures to demonstrate climate change resilience. The framework of recommendations has become the foundation for many national and international climate-related disclosure requirements. |
Annual Reporting
Transparency and accountability are key to good governance. In order to publicly demonstrate its commitment to responsible investment practices, NILGOSC report annually against a number of frameworks:
PRI reporting framework
Since commencing support of the PRI in 2007, NILGOSC has reported on its implementation of the principles through mandatory annual reporting. The reporting framework was overhauled by the PRI in 2020. Further changes have been made to the reporting framework; the most recent iteration of which was released in 2023 for signatories’ completion. The framework is designed to assess an organisation’s overarching approach to responsible investment, the integration of responsible investment in manager selection, appointment and monitoring, and engagement across asset classes.
NILGOSC’s reports for the year ended 31 March 2023 demonstrated that NILGOSC continued to perform either in line with or above the median of signatory scores in the majority of the areas assessed: receiving a 5 Star rating for the ‘Policy Governance and Strategy’ module and 4 stars for the ‘Confidence Building Measures’ module. For the six sub-categories assessed as part of the ‘Manager Selection, Appointment, and Monitoring’ module, NILGOSC received three 4 Star and three 3 Star ratings, with only the ‘Infrastructure’ sub-category performing below the median.
- NILGOSC’s 2023 Public Transparency Report is available for download from the PRI’s database.
- NILGOSC’s 2023 Assessment Report is available for review: PRI Reporting Framework 2023 – Assessment Report
(Please note: Assessment Reports are the intellectual property of the PRI. To request an accessible version, please contact investment@nilgosc.org.uk)
Assessment Methodology:
- The high-level assessment methodology can be found under the Assessment Methodology section of the “How Investors are assessed on their reporting” page of the PRI website.
- Question-level assessment criteria can be found after each core indicator on the “Investor Reporting Framework” page of the PRI website.
TCFD-aligned reporting
NILGOSC actively supports the Task Force on Climate-related Financial Disclosures (TCFD) recommendations and was added to the official list of supporters in June 2020. In alignment with the recommendations, NILGOSC produced its fourth Climate-related Disclosures Report for the year ended 31 March 2024. The report is available to review:
Stewardship Reporting
The FRC UK Stewardship Code was substantially revised in 2019 and the new UK Stewardship Code 2020 took effect from January 2020. NILGOSC supports the principles set out in the Stewardship Code and seeks to promote these principles both directly and indirectly through the mandates given to its investment managers. Following submission of its first Stewardship Report in 2022, NILGOSC was successful in being listed as a signatory to the UK Stewardship Code. In order to remain a signatory, NILGOSC prepares annual Stewardship Report submissions, which are assessed by the FRC. NILGOSC was pleased to be informed in July 2024, that it continued to meet the FRC’s expected standard of reporting and remained a signatory to the UK Stewardship Code for the third consecutive year.
NILGOSC’s report is available to review:
Voting Reports
NILGOSC will exercise its voting rights, if possible, at all company meetings within its actively managed equity portfolios. Peak voting season runs from April to June, and stewardship activity is reported for the 12 months to 30 June each year. Annual Voting information is available for review, as well as detailed monthly disclosures of votes cast, released on a quarterly basis: