Pension Protection Fund Responsible Investment Report 2020/21 11 Purpose and governance continued Oversight and reporting EOS provides voting recommendations We hosted our 昀椀rst to us for our segregated equities, in line Member Forum in with its published corporate governance principles. However, we are always 2020, presenting a New internal RI reports in control of the vote and have the unique opportunity to We provide monthly updates on the ability to exercise our voting rights in management of our climate-related segregated holdings in line with our own 昀椀nd out exactly what and other ESG risks to the CIO and policy and principles. our members think. the Head of Investment Strategy. EOS carries out engagements and We also highlight portfolio-relevant exercises votes in line with the information or events as they arise Hermes Responsible Ownership in our daily investment meetings. Principles. These have been devised to contribute to better management of companies and the sustainability of investments over the long term. EOS is also a signatory to the Best Taking action: Practice Principles for Providers of This year the ESG team developed Shareholder Voting Research. a new quarterly RI update report for the Investment Committee. The report reviews our RI policies, processes and policy review schedule. It provides updates Taking action: on stewardship, manager We monitor EOS’ activities appointments and monitoring, through regular contact, and ESG oversight of managers Keeping our members updated and key quantitative metrics such more formal quarterly client as ESG scores and carbon meetings. We participate in We continuously review all existing More broadly, we actively seek our intensity by asset class. its semi-annual client advisory and potential managers’ policies, as members’ and stakeholders’ views and council meetings and have fed well as their ESG integration processes feedback by a number of methods, Oversight of stewardship services back to the 昀椀rm extensively on the and reporting to ensure they meet including quantitative surveys, development of its new client our evolving minimum standards. We consultations, focus groups, one- We have chosen to outsource portal over the last year. Our also keep a close eye on the portfolios to-one interviews and our Member stewardship activities for our active participation in these meetings of our managers through our own Forum. We know that stakeholders segregated listed equities, to ensure that enables us to in昀氀uence EOS’ systems, and consider whether they expect us to invest responsibly and are in line with our expectations we believe we have a duty to set the our shares are voted cost-e昀케ciently and approach, the issues of focus and our portfolio companies are engaged the targets of our engagement, so of the mandate agreement. This highest standards of practices. with, where ESG concerns arise. that the service remains bene昀椀cial analysis helps inform our ESG review, as discussed on page 14. for our members. Our ODD function assists with monitoring our managers’ ESG risks Taking action: We’re committed to regular Taking action: and stewardship policies. They also reporting and transparency so that We regularly review our review policies in key areas such as our members and stakeholders can outsourced stewardship services ethics, business continuity, disaster be aware of our progress and and retendered for this in October recovery and money laundering. activities in all areas, including 2020, taking the opportunity to stewardship. We regularly update expand our requirements around We will not appoint or allocate more voting and engagement. We capital to managers that fall short of our website with timely published wanted to improve and expand our standards. voting and engagement statistics coverage to our in-house managed and responses to consultations. assets in 昀椀xed income and cash, For example, when we identi昀椀ed that an We’re publishing our second as well as drive greater insight on infrastructure investment manager annual RI report, we provide RI the engagement services for our didn’t have a Gifts and Hospitality policy, disclosure in our Annual Report pooled assets. Following a due we made this a requirement of its and Accounts and we’ve published appointment. a dedicated TCFD report. Our diligence process, we reappointed Head of ESG frequently speaks at EOS at Federated Hermes. industry conferences and events.