28 www.ppf.co.uk Responsible Investment Report 2019/20 29 Being active owners – continued A p p Collaborative efforts r o to engage and improve ach RI standards across asset classes Example: Continuing efforts to drive Example: Leveraging PRI’s Collaboration diversity and inclusion in industry Platform following mining disaster We collaborate with industry At an organisational level, diversity and inclusion is a vital The collapse of Vale’s dam at Brumadinho (January peers on initiatives that support commitment for the PPF and we look to encourage and 2019) killed more than 250 people consisting primarily progression towards our goals, such promote best practice, for example through gender, of employees, and Vale lost $1.6 billion (US) attributed to as supporting the Paris Agreement ethnicity and disability working groups. Upon signing the related costs in just the first quarter of the year. Women in Finance Charter two years ago, we committed E and the transition towards a to having 40 per cent female representation within Through the PRI, we joined a collaborative engagement to xe c decarbonised economy. One u senior management by 2021. In October 2019, we hit push for a transparent investigation into the causes of the t forum is the UK Pension Scheme io Responsible Investment Roundtable this target two years early. collapse, as well as encouraging the company to outline a n which meets quarterly, where we preventative action plan. Lack of appropriate governance, discuss issues with asset owner We are also members of The Diversity Project, with technical faults and overdue maintenance were identified peers. In addition, the PPF’s Head a PPF Executive Committee member on its Advisory as key causes. of ESG is a member of the PRI's Committee, and our Director of Legal, Compliance and Infrastructure Advisory Committee. Ethics on its Steering Committee. This engagement Vale was challenged to review its safety management We also support industry efforts adds another facet to our aspiration to promote a more procedures, and the board stepped in and appointed to more consistently measure ESG sustainable financial system, and within our investments, independent expert committees to oversee the response risks, such as the SASB’s sector- we have been working with both external managers to the situation. This led to changes in management and investee companies to support improvements in and the appointment of a new CEO, increased focus L specific materiality disclosures and o diversity and inclusion. on corporate culture and safety and operational goals. o metrics, which we use ourselves k We support many other industry collaborations and networks, Vale set a target to reduce its reliance on tailings dams, in as a guide when making direct g f and the following are some examples of our collaborative activities increasing the use of dry proceedings to 70 per cent of o investments. r during the year. its total volume by 2023. However, the company can still w ar improve engagement with families of its employees and d members of the local community affected. The tragic event highlighted the importance of active investor engagement, and opened up opportunities to engage across the sector more broadly, such as with the Investor Mining and Tailings Safety Initiative and the International Council on Mining and Metals (ICMM) independent review of global standards. Example: TCFD stewardship to drive industry Example: Driving policy and industry expertise and promote adoption change on climate change The TCFD recommendations are critical in considering We are keen to support policy development and a business’s climate-related risks and opportunities. cohesive industry dynamics, and we have been members We are delighted to sit on the Pensions Climate Risk of the Institutional Investor Group on Climate Change Industry Group that was formed by the DWP and TPR. (IIGCC) since 2018. Throughout 2019/20, we have The group was formed in 2019 and worked extensively participated in the Paris Aligned Investment Initiative, to produce guidance for UK occupational pension and contributed as a member of the Strategic Asset schemes around TCFD alignment to help trustees Allocation working group. assess, manage and report on climate-related risks. The open consultation for the guidance was launched Robust, transparent and strategic reporting by in March 2020. companies is vital, and we demonstrate our support for this through membership of CDP and the Transition We also promote the TCFD recommendations to our Pathway Initiative (TPI). We are also a signatory of Climate external managers to encourage acceptance, and seek Action 100+, which targets the 100 largest corporate to see an increase in TCFD alignment, which includes greenhouse gas emitters (accounting for two thirds of scenario analysis of both physical and transition annual global industrial emissions) and 61 other focus risks. Many of our external managers are already companies, to take necessary action on climate change. TCFD supporters and are working towards increased The initiative’s ultimate goal is to limit global warming to disclosure. Likewise, we expect our external managers less than 2°C, which it aims to do through encouraging to engage with underlying issuers on the same these companies to curb emissions, improve governance disclosure expectations. and strengthen climate-related financial disclosures.