The £6.5bn (€8.9bn) Royal Mail Pension Plan (RMPP), a signatory to the Principles for Responsible Investment (PRI), has named Sweden-based GES as its engagement agent for its equity portfolio and its emerging market investments.
In a statement, GES said that under the mandate, it would first provide an overview of the RMPP’s exposure to ESG (environmental, social and governance) risk among the holdings in question. The scheme’s stock investments make up about half the current portfolio.
Engagement with investees on ESG issues important to the RMPP is the other part of the mandate, and GES said it would report on progress quarterly. The scheme expects that companies to uphold the principles of the UN Global Compact among other international norms.
“The collaboration between GES and Royal Mail Pension Plan seeks sustainable value by addressing areas such as the environment, climate change, labour standards and human rights and also supports our commitment to the PRI,” said Ian McKnight, the scheme’s Chief Investment Officer.Added Hanna Roberts, who recently took over as GES’ Chief Executive: “We are delighted to support RMPP as it takes its responsible investment approach to a new level.”
According to the RMPP’s statement of investment principles (SIP), the scheme already directs its asset managers to comply with the UK’s Stewardship Code and vote its shares in investee companies.
The RMPP further states that the asset managers may not invest in companies that are under a UN trade embargo or those involved in terrorism, money or drug trafficking. Companies that do not take into account the reasonable long-term interest of their shareholders are also excluded, the RMPP adds.
Including the current mandate, GES says that it engages on ESG issues for more than 100 institutional clients with €1trn of assets between them. The firm is based in Stockholm and employs a 15-member engagement team.