Engagement and initiatives

NILGOSC acknowledges that good environmental, social and governance (ESG) practices can have a favourable impact both on financial performance and society in general.

Accordingly, 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.

In 2010 NILGOSC also commenced direct engagement with the UK companies in which it holds shares. NILGOSC writes to all UK listed companies when it has voted against resolutions at the Annual General Meeting (AGM) to outline the rationale for the decision. NILGOSC aims to write to these companies in advance of the meetings to make the engagement as effective as possible. In January 2015, NILGOSC began issuing engagement letters to other European listed companies, as well.

In order to demonstrate its commitment to responsible investment practices, NILGOSC is a signatory to the United Nations Principles for Responsible Investment.  NILGOSC collaborates with other like minded investors through the UNPRI on engagement and initiatives.  NILGOSC also reports on its implementation of the Principles for Responsible Investment through the UNPRI reporting framework on an annual basis.

About the PRI.

NILGOSC reports on its implementation of the Principles for Responsible Investment through the PRI reporting framework on an annual basis. The framework assesses the organisation’s overarching approach to responsible investment, the integration of responsible investment in manager selection, appointment and monitoring and active ownership within asset classes, including engagement and proxy voting.

In July 2020, NILGOSC received its assessment report for the year ended 31 March 2019.  The results of this year’s assessment were positive with NILGOSC receiving an A banding for eight of the modules, including for strategy and governance, and a B for the ninth.  This maintains our results from last year and means that NILGOSC is continuing to perform either in line with or above the median of signatory scores in each of the areas assessed.

PRI assessment methodology
RI Transparency Report 2020 (YE 31 March 2019)
Assessment Report 2020 (YE 31 March 2019)

NILGOSC aims to promote effective stewardship and engagement with companies by participating in collaborative engagements and initiatives, with PRI signatories through the PRI collaboration platform or with other investor groups. A list of recent initiatives NILGOSC has been involved in is set out below:

  • NILGOSC joined the Investment Association and PLSA’s working group on asset manager data for Taskforce on Climate-related financial disclosures (TCFD) aligned disclosures. The working group’s intention is to formulate a template for asset managers to provide emissions data and metrics, that pension schemes can then use in compiling TCFD-aligned reporting.
  • NILGOSC is an inaugural member of the Occupational Pensions Stewardship Council (OPSC), which officially launched on 8 July 2021. Established by the DWP in response to the Asset Management Taskforce’s 2020 recommendation that a ‘dedicated council of UK pension schemes should be established to promote and facilitate high standards of stewardship of pension assets’, the OPSC aims to provide schemes with an independent forum for sharing experiences, best practice and research, as well as providing practical support.
  • NILGOSC is a signatory to the 2021 Global Investor Statement to Governments on the Climate Crisis. The Investor Statement was drafted through a global collaboration among the seven organisations that are the founding partners of the Investor Agenda, and calls on governments to raise ambition and accelerate action to tackle the climate crisis.
  • NILGOSC is a signatory to CDP’s 2021 Non-Discloser Campaign.
  • NILGOSC is a signatory to CDP’s 2021 Climate Change, Water and Forests campaigns.
  • In January 2021, NILGOSC joined with the PRI and other UK asset owners, to write to the UK government calling for continued climate ambition in advance of COP26, including progress on land use challenges, energy efficiency and smoothing the transition to zero-emissions vehicles.
  • NILGOSC actively supports the Financial Stability Board Task Force on Climate-related Financial Disclosures (TCFD) and was added to the TCFD website’s official list of supporters in June 2020.
  • In June 2020, NILGOSC joined other businesses and Investors in signing letters to the UK Government and to EU heads of state and government, calling for a sustainable resilient recovery.
  • With other IIGCC members, NILGOSC signed an open letter to EU leaders ahead of the European Council meeting in December 2019, encouraging them to approve a target to achieve net zero emissions by 2050.
  • NILGOSC is a signatory to CDP’s 2020 Non-Discloser Campaign.
  • NILGOSC is a signatory to CDP’s 2020 Climate Change, Water and Forests campaigns.
  • In December 2019, NILGOSC signed the PRI’s Investor Expectations Statement on Climate Change for Airlines and Aerospace Companies.
  • In November 2019, NILGOSC signed the PRI’s letter to the SEC opposing proposed rule changes, which it believes would “introduce major impediments to environmental, social and governance (ESG) integration”
  • In September 2019 NILGOSC joined 229 other investors in signing an Investor statement on deforestation and forest fires in the Amazon.
  • In June 2019, NILGOSC joined the Institutional Investors Group of Climate Change (IIGCC), which is the European membership body for investor collaboration on Climate Change. IIGCC represents over 170 investors with £20tn in assets.
  • With other supporters of Climate Action 100+, NILGOSC co-filed a shareholder resolution at BP plc, calling on the company to demonstrate that its strategy is consistent with the Paris Agreement goals.  BP was supportive of the resolution, and it passed with over 97% shareholder support at BP’s AGM in May 2019.
  • NILGOSC is a signatory to the 2018 Global Investor Statement to Governments on Climate Change which was relaunched in 2019.
  • Signatory to 2018 PRI facilitated letter to IOSCO on ESG disclosure.
  • Founding supporter signatory of the Climate Action 100+, a five-year investor-led initiative to engage more than 100 of the world’s largest corporate greenhouse gas emitters to curb emissions, strengthen climate-related financial disclosures and improve governance on climate change risks.