12www.ppf.co.ukResponsible Investment Report 2019/20 13 The foundations of our RI principles A Embedding our core focus on risk management. It covers ppr our processes and procedures, PRI’s six Principles Our climate change policy governs our principles and actions around climate change related risks relevant to oa beliefs and investment our investments. The policy was formally approved by the Board in 2019 and can be accessed on our website. c principles into our RI while also facilitating flexibility and for Responsible Throughout this report, we have provided signposts for each aspect of how we are implementing our climate h longevity, to enable us to keep pace Investmentchange policy: strategywith evolving regulation in this space. The PPF was an early signatory We view ESG factors as the Climate change policy to the PRI back in 2007, and has interaction of our investments Principle 1: We will incorporate (TCFD pillar*)Location considered the PRI’s six Principles with:ESG issues into investment analysis and decision-making Climate-related investment Our core RI beliefs (12); Managing climate change risks and opportunities as a base for guiding our own core - the physical environment and processes.beliefs (G)(30-37) RI beliefs and investment principles. climate (E); These beliefs are also embedded Assessment of Use of ESG data to identify and manage ESG risks (16, 31-32); Managing E Principle 2: We will be active x in our Statement of Investment - communities, workforces, wider climate-related impacts climate change risks and opportunities (30-37) e owners and incorporate ESG c u Principles. Our RI strategy and society and economies (S);on investments (S) t framework was further developed issues into our ownership ion in 2018/19. It incorporates ESG - governance structures of the policies and practices. risks and opportunities across our organisations and markets we External manager expectations Our RI approach (14-17); Working with our external managers (15-16, 20); investment process, with an essential invest in (G).Principle 3: We will seek around climate-related Managing climate change risks and opportunities (30-37); Climate change appropriate disclosure on ESG stewardship (RM) stewardship in risk management (32-33); Roadmap: assessing climate exposure issues by the entities in which (30-31) Our RI strategy we invest.Collaboration with peers Engagement with industry and collaborative initiatives (17); Collaborative Our core RI beliefsPrinciple 4: We will promote and industry initiatives (RM)efforts to engage and improve RI standards across asset classes (28-29); acceptance and implementation Managing climate change risks and opportunities (30-37) 1. By acting as a responsible and vigilant asset owner, we can protect L o of the Principles within the o and enhance the value of our investments.Reporting and engagement on Managing climate change risks and opportunities (30-37); Climate-related k investment industry. in climate-related activities (M&T) disclosure (35) g f o 2. ESG factors can have an impact on the performance of our r Principle 5: We will work w investments, and the management of ESG risks and exploitation of *G – Governance; S – Strategy; RM – Risk Management; M&T - Metrics & Targets ar ESG opportunities can, particularly for a portfolio-wide issue like together to enhance our d climate change, add value to our portfolio.effectiveness in implementing the Principles. Under stewardship, our minimum One aspect we recognise as an area Principle 6: We will each report standards policy sets out our for improvement is sharing what on our activities and progress requirements for responsible we do more widely, which we are RI Frameworktowards implementing the conduct from our underlying issuers addressing in a number of ways, Principles. and external managers, which including the publication of this are aligned with internationally report. Governance & Strategic RiskMetrics & recognised norms or international AccountabilityDirection & ManagementTransparencyconventions for controversial Policy activities that are ratified into UK law. A new stewardship policy is also Priorities being developed with a bespoke voting and engagement focus for certain themes. Finally, for reporting, we are a strong advocate for transparency across Climate ChangeStewardshipReportingthe entire investment value chain and a supporter of several disclosure initiatives, including the TCFD and Underneath the RI framework, we have identified three key priorities: Climate the CDP, where we are an Investor Change, Stewardship, and Reporting. To support these priorities, we apply member. We were pleased to receive a set of specific policies, reviewed annually, to ensure that emerging best an assessment score of A+ for the practices are considered. Strategy & Governance module in the 2019 PRI reporting cycle, and A across nearly all other modules.