Giant UK coal mining pension funds sign up to Stewardship Code

Latest asset owners to issue compliance statement

The two giant UK mining industry pension funds, with combined assets of around £20bn (€23.4bn), have become the latest major asset owners to sign up to the Stewardship Code.

The £11.1bn Mineworkers Pension Scheme and the £9.2bn British Coal Staff Superannuation Scheme have both issued identical statements of compliance with the code, which was launched last year.

Both sets of trustees say they “believe that widespread adoption of good Corporate Governance practice will improve the quality of management and, as a consequence, is likely to lead increase in the returns available to long term investors”.

Both have appointed Hermes Equity Ownership Services (EOS) to assist it to fulfill their “fiduciary responsibilities as a long-term shareholder”.

The funds’ summarised historic voting information is available on their websites. “We disclose this quarterly in arrears so as to avoid compromising dialogue with companies in our portfolios, whilst being fully transparent and accountable.”The funds also disclose, on a quarterly basis, summary details of the engagements undertaken by Hermes EOS on its behalf.

Engagements may relate to “longer-term strategic, environmental, social or governance issues”, which may not have immediate stock-specific impacts, they say.

The funds, two of the largest in the UK, said the appointment also signals their commitment to the principle of collective shareholder engagement – one of the seven principles of the code, which was launched in July 2010.

They support “collaborative shareholder action and where applicable will communicate and collaborate with other shareholders, supported by Hermes EOS”.

Hermes deploys the funds’ votes “as a lever for positive change at companies”.

The pair join the 43 asset owner signatories to the code that are listed by Financial Reporting Council. The Royal Mail Pension Plan has also indicated it would sign up before the end of this year. Link