Border to Coast highlights ESG efforts in TCFD report

All Border to Coast investment funds have remained materially below their respective benchmarks for carbon intensity, some by as much as 50 per cent, according to its latest environmental, social and governance (ESG) disclosure reports.

The Responsible Investment and Stewardship and Taskforce for Climate-related Financial Disclosures (TCFD) reports both confirmed that there were decreases in all carbon metrics both in absolute terms and relative to the benchmarks in all funds reported by the pool.

In the reports, Border to Coast Pensions Partnership, which is responsible for managing £24.7bn, outlined how it is delivering its commitment to fully integrate responsible investment (RI) and effective stewardship on behalf of its 11 Local Government Partner Funds.

In particular, the group highlighted that it achieved an A and A+ score in its first year as signatory to the UN-supported Principles for Responsible Investment (PRI).

This was alongside work with Albourne Partners to raise ESG standards, which resulted in the launch of a framework for private markets based on the recommended due diligence question from PRI.

The report also highlighted work undertaken in relation to the pool's role as a steward of customers’ capital and to the management of ESG investment risks and opportunities, with Border to Coast having held 1,250 engagement meetings with companies.

A quarter (25 per cent) of these were due to governance concerns, whilst 24 per cent were due to social concerns, and 23 per cent were due to governance concerns.

In addition to this, the group voted on more than 12,000 resolutions at 902 shareholder meetings, and participated in a total of 10 collaborative initiatives.

The results of Border to Coast's annual private markets ESG questionnaire were also included in the report, revealing that 82 per cent of investment staff receive annual ESG training and 100 per cent of general partners (GPs) have an ESG or RI policy in place.

However, the survey also found that only 48 per cent of GPs track metrics in line with sustainable development goals (SDGs) and just 30 per cent track climate metrics in line with TCFD recommendations.

Despite this, Border to Coast emphasised that it continues to work with these managers and to encourage them to develop their RI practices.

Border to Coast CEO, Rachel Elwell, commented: “We were established with the belief that responsible investment, including effective stewardship and transparent disclosure, is fundamental to our collective success and this remains core to what we do and how we operate.

“Despite our relative youth, with the support of our partner funds through our collective size and with effective engagement, we are already driving standards in ESG reporting and, as a long-term investor, we are making a difference in how companies act – and this will only increase in the years to come.”

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