The top three environmental, social and governance (ESG) concerns amongst railway pension scheme members are the fair treatment of workers, climate change, and fair pay, according to research from Railpen.

The concerns were identified as part of Railpen's Sustainable Ownership Member Review, in an effort to understand how members want to be communicated with on ESG-related issues.

The report, a follow up to Railpen's Stewardship Report, aims to explain to members how the scheme is addressing ESG concerns, using case studies and straightforward language, as well as a "jargon buster" glossary to help members' understanding.

It revealed that over half (59 per cent) of votes at annual general meetings saw Railpen vote against, abstain or refuse to support company management, most commonly in respect of executive pay and quality of board directors.

Additionally, the report highlighted the creation and launch of engagement campaigns led by Railpen, including the Investor Coalition for Equal Votes.

The report also detailed Railpen’s net-zero engagement approach, which included creating a detailed framework for identifying priority companies, assessing these companies’ alignment to the Paris Agreement, and encouraging them to make progress on specific objectives.

Looking ahead, the report said that Railpen will be focusing on its plan to become net zero by 2050 and take a lead on sustainable ownership issues, also confirming plans to survey members again later in 2022 to understand whether views have changed.

Railpen CEO, John Chilman, commented: “Our job is to protect and grow the value of our members’ assets to ensure they can retire securely.

“We do this by investigating in companies that we believe will do well in the long-term.

“We believe the most successful companies in the long-run are well-run, treat their suppliers, customers and workers fairly and seek to address all the risks and opportunities related to how their business works – which include ESG issues.

“They can adapt their business models to deal with major threats or issues, such as the COVID-19 pandemic, climate change or an ageing population.

“Our size means that we have a responsibility to take the lead on sustainability initiatives, activities and policies, and we are pleased with our progress so far.”

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