BTPS Sustainability Policy
The purpose of this document is to articulate BT Pension Scheme’s (“BTPS” and the
“Scheme”) approach to sustainability across the Scheme’s assets
1. Approach
Developing from the Hermes Responsible Ownership Policyi, the BTPS Sustainability
Policy applies across all asset classes and markets in which we invest. The Trustee
has a fiduciary responsibility to meet the Scheme's liabilities and as a long term asset
owner considers sustainable factors to improve long term risk adjusted returns.
BTPS is a founder signatory of the UN-backed Principles for Responsible Investment
(PRI) initiativeii which forms the basis of this Policy. The Trustee is committed to its
membership and active support of the organisation and we encourage our managers
and fellow pension funds to sign and implement the PRI.
2. Oversight and reporting
Our sustainable activities are overseen by the BTPS Trustee via the Policy
Committee, a sub committee of the Trustee Board. The Policy Committee will review
the sustainability policy annually and recommend to the Trustee Board and/or
Investment Committee appropriate actions
We will report on details of our sustainability activities, including voting and
engagement data, in the BTPS annual report and accounts and on the BTPS
website.
3. Influence
As a universal asset owner the value of our investments are closely tied to the
economy as a whole. To protect and enhance the Scheme’s long-term value as well
as reduce risk, it is in our beneficiaries interests to raise standards across the whole
market by engaging with policymakers, regulators and governments to encourage
them to address failures as well as consideration of new policies and policy direction.
We also acknowledge our leadership position and aim to leverage this as one of the
UK’s largest DB corporate pension schemes.
We will collaborate with other institutional investors where possible to influence best
practice, and enable us to strengthen the voice of asset owners.
4. Asset allocation
We endeavour to allocate capital to investment conduits which are well aligned to
BTPS’ requirements. This should include investments in sustainable themes. We will
regularly monitor the sustainability of our investments in terms of size, quantum of
risk and reputational risk.
5. Our investment managers
All parts of the investment chain which work on the behalf of the Scheme should be
aligned to our beneficiaries interests. Both individually and working with industry
groups we seek to enhance best practice and alignment of our agents and hold them
accountable.iii.
We also encourage all our investment managers to give due consideration to and
report on sustainable factors which could be material to the long-term value of our
investments. BTPS will assist, encourage and challenge managers to improve the
quality of their integration of environmental, social and corporate governance factors
into investment processes and reporting.
6. Stewardship
We strive to be active asset owners across all asset classes and have developed a
comprehensive stewardship policyiv. Outside of listed markets we will encourage our
managers to monitor and engage investment partners and portfolio companies.
7. Engagement
We publicly endorse the FRC’s UK stewardship code and support the development
of similar codes around the world to encourage active ownership by all asset owners.
We will adopt a collaborative and thematic approach to our corporate engagements
whilst always being mindful of the objectives of our corporate sponsor, BT plc, and
other potential conflicts of interest (for example, where we are both equity and bond
holders of the same company).
Engagement priorities and themes are overseen centrally by BTPS and activities are
outsourced to our engagement service provider. Where appropriate we will
encourage our investment managers to integrate the results of our engagement
activity into their investment process.
8. Voting
We aspire to vote all of our directly held equities and bonds. BTPS, via its outsourced
voting provider, will support the recommendations of a company’s board unless it has
a good reason not to do so. Please refer to the BTPS voting policy for further detailv.
Version 3.0
April 2013
i
Available at http://www.hermes.co.uk/Portals/8/The_Hermes_Ownership_Principles_UK.pdf
ii
The Principles were devised by the investment community to reflect the view that sustainability factors
can affect the portfolio performance and must be given appropriate consideration by investors if they are
to fulfil their fiduciary (or equivalent) duty. Assets under management by PRI signatories is more than
$32 trillion.
iii
See ICGN Model Mandate Initiative
http://www.icgn.org/files/icgn_main/pdfs/drafts/mmi_consultation_31jan2011.pdf
iv http://www.btpensions.net/153/267/frcs-uk-stewardship-code
v http://www.btpensions.net/151/voting-disclosure