Pension Protection Fund Responsible Investment Report 2020/21 9 Purpose and governance continued Governance overview Highest governing body with oversight of RI and stewardship Updating key policies PPF Board and update activities (including climate-related). Taking action RI governance and stewardship The Board has committed that the Investment of our investments: Investment Responsibility for developing and maintaining the Fund’s RI and Committee will review our SIP and RI policies annually, committee stewardship principles and policies (including climate-related). to ensure they stay relevant and ambitious. During the year, the Investment Committee reviewed our SIP, our climate change policy and our exclusion policy. The Committee also approved our new stewardship policy. Investment Team Led by the CIO. Responsibility for ensuring adherence to the RI All policies are available on our website. framework, stewardship principles and associated policies across all asset classes, both internally and externally managed. New SIP New stewardship policy ESg Team The ESG Team, as part of the Investment Team, provides support and expertise, oversees appropriate implementation of the RI framework, As part of this year’s annual We developed a new stewardship engages with portfolio managers and monitors investments for ESG review and our drive to deliver policy during the year and it was risks and opportunities. Engages with external asset managers and best practice, we chose to update approved by the Investment stewardship service providers. our SIP in line with the DWP’s Committee and Board in amended occupational pension March 2021. Follows the PPF’s RI framework and stewardship policy, undertakes schemes regulations. Asset managers and This policy outlines our approach ESG integration and engagement, then reports transparently stewardship service and accordingly. Within the new SIP we provided to stewardship – including how provider (EOS at further detail on our principles we engage with our managers around stewardship and monitoring and underlying issuers on RI issues – Federated Hermes) external managers. We also as part of managing the Fund, in line included ESG and climate-related with the SIP. risks as a speci昀椀c part of our risk register, which is regularly It has been developed to allow us monitored by the Investment to address the requirements of the Committee. Financial Reporting Council (FRC) Our Investment UK Stewardship Code 2020 and the European Union Shareholder Committee Rights Directive II (SRD II). reviewed our SIP, climate change Review of climate Review of exclusion policy and change policy policy exclusion policy during the year. In 2019, we 昀椀nalised a speci昀椀c Our exclusion policy applies to all climate change policy for our funds and relevant asset classes. investments, which outlines It covers controversial weapons, our approach to climate-related recreational cannabis and sovereign risks and opportunities. The issuers with a UN imposed arms Investment Committee reviewed embargo. this policy in 2020/21 as part of its annual review cycle. The list is updated on a quarterly basis, as determined by an independent external data provider.