Pension Protection Fund Responsible Investment Report 2020/21 27 Voting continued Votes on shareholder resolutions The most active Voting in pooled vehicles per region markets were We are in the process of setting up a 5% 1% Developed Asia Emerging Markets, process for using our stewardship provider’s platform to monitor statistics 25% EM and Frontier markets North America and on votes cast on our behalf through 27% Europe Developed Asia. pooled mandates. We will then be able North America to raise any practices or voting actions that don’t align with our expectations in UK our discussions with pooled managers. Australia & NZ While our views do generally align with 11% 31% our managers’, we’re keen to exercise a consistent voice on key topics. Where we’ve been able to, we’ve taken advantage of a split voting Climate-related voting set-up to allow us to vote on or While we strongly encourage climate- ‘override‘ our shares in a pooled related stewardship across our fund. We have put this in place for investment portfolios and asset classes, two of our global equity mandates we direct our own voting within our this year. segregated equities. For mandates where this isn’t possible, we carry out ex-post assessments Taking action: of voting activities for our portfolio across our key topics or most material In the past year, as shown in the issues. When they’re allowed to share table on the previous page, we information, we 昀椀nd out how our voted on a total of 34 shareholder managers intend to vote on high-pro昀椀le resolutions speci昀椀cally related to issues ahead of AGMs. However, we climate and environmental issues acknowledge the challenges with pre- within 16 companies. declaring votes, and would welcome any action to address this in future. We voted in favour for inclusion of the Making voting more This makes it hard to position our Paris Agreement 1.5ºC Target in Articles transparent votes ahead of meetings and creates of Association of the Finnish power Taking action: the risk of misaligned voting for the producer Fortnum, a Climate Action Over the past year, we voted in We would welcome further regulatory same company. Greater transparency 100+ target company. We also voted in 5,555 meetings on more than guidance around voting rules and would prevent potential discrepancies. favour of corporate disclosure on 76,000 resolutions across six transparency in pooled funds. addressing stranded carbon asset risks An additional barrier to all of our with the American natural gas company pooled mandates with applicable We have encountered signi昀椀cant Cheniere Energy. ballots. We supported more than challenges and barriers to overcome ballots being voted is created if a fund 50 per cent of all shareholder around voting, particularly with manager sets a materiality threshold Within our externally managed pooled accounts. for when to cast votes. This is often resolutions in two mandates and based on the share of ownership accounts, some of the signi昀椀cant climate 41 per cent in a third pooled fund. For example, our managers use for a position. For non market- votes cast were at the annual AGMs of cap weighted strategies, this can fossil fuel majors such as BP, Eni, Vale Within our passive equity strategy, di昀昀erent proxy voting providers and and BASF. we voted on 2,049 shareholder reporting formats. Not all managers result in a high number of positions resolutions, 199 of which were will pre-declare their voting intentions. being considered out of scope, related to climate and which is in con昀氀ict with our policy environmental issues, while 34 to vote all shares where possible. were related to social equity and human rights. In 18 per cent of cases we voted against management.