In its role as a Trustee of other people’s pension assets, Capital Cranfield takes its fiduciary responsibilities extremely seriously. As long-term stewards of investments which are expected to pay out to pensioners over a period of many decades, we believe that it is very important for us to take proper note of all the risks which might threaten the security of these payments.
We believe that it is important for Trustees to invest responsibly, targeting sustainable outcomes to ensure all our schemes achieve the best member outcomes. We believe that environmental, social and governance (“ESG”) factors (including but not limited to climate risk) will be financially material over the time horizon of our schemes, and therefore we believe that it is important to consider ESG-related factors when making decisions in relation to our schemes’ investments.
We will encourage Trustee Boards to take an active role in the investment of schemes’ assets, and to incorporate ESG issues into investment analysis and decision-making processes and into the ownership policies for their schemes. We will strongly encourage them to seek appropriate disclosure on ESG issues by the entities in which their schemes invest in line with regulatory guidance.
Environmental and climate change risks
We believe that environmental factors (including but not limited to climate change) give rise to systemic, long-term financial risks to the value of our schemes’ investments, and we think it is critical to carefully consider the risk they pose when making investment decisions.
We are mindful of the societal impact of our schemes’ investment decisions, and we are committed to promoting a responsible investment approach which is at once responsive to this and consistent with our overarching fiduciary obligations.
We recognise the importance of the Trustees’ role as stewards of capital and the need to ensure the highest standards of governance and promotion of corporate responsibility in the underlying companies and assets in which our schemes invest, as ultimately this creates long-term financial value for our schemes and their beneficiaries.
These principles and practices will be applied in a proportionate way depending on the size and governance resources of each scheme and recognising that in many cases (especially for smaller schemes) investments may be held predominantly or entirely in pooled funds where the Trustees’ ability to directly influence fund managers’ actions may be limited, or in assets such as bulk annuities or Liability Driven Investments where ESG factors and stewardship issues are less directly relevant.