12 Pension Protection Fund Responsible Investment Report 2021/22 OUR PURPOSE AND GOVERNANCE CONTINUED Developing our people Our commitment to industry-leading diversity Resources and training We’re actively building a diverse and inclusive workplace, During the year, we have focused on continual Today, 79 per cent of employees agree with the statement Next steps: development and training across the entire Investment where everyone can feel able to be themselves and is that, ‘the culture at the PPF allows people like me to be Our ambition is to increase ethnic minority representation team on ESG matters and stewardship activities. valued for their di昀昀erences. myself’ and 86 per cent agree that we actively encourage at all levels of our organisation. As we shared in our Within the ESG team speci昀椀cally, we have hired an Over the past three years, we’ve done a lot of work to make diversity in all its aspects, with strong agreement in certain Diversity Pay Gap report, we also have speci昀椀c targets to ESG data analyst to improve our e昀케ciency of collecting, our structural processes more inclusive. For example: under-represented groups. We’re con昀椀dent that we’re doing increase the number of black people who we hire as new assimilating and reporting on ESG and stewardship. a lot to support and increase diversity, but we’re aware that joiners and in senior roles, to re昀氀ect the ethnic diversity of More recently, we have also created a full-time dedicated • Rather than assume our recruitment processes aren’t this work takes time to come to fruition, particularly as we Croydon where we’re headquartered. Stewardship Manager role as we recognise the need for disadvantageous to anyone, we’ve thoroughly reviewed have low levels of sta昀昀 turnover. a senior person with specialist experience to lead our them to check for and prevent any inadvertent barriers While we’ve increased ethnic minority representation strategy and activities in this area. and bias at Board and Executive Committee level, our overall low sta昀昀 turnover hasn’t allowed us to drive change as fast However, we continue also to work with an external • We’ve continued to nurture, develop and promote 86% as we would like. To address this, we continue to run specialist stewardship services provider with its own internal talent, investing in future leaders, specialist apprenticeship programmes, build our talent pipeline extensive, diverse and experienced stewardship training and 昀氀exible working and nurture, develop and promote people internally. • We aim for all groups, regardless of background, to be of PPF employees agree the organisation team. We regularly assess whether this provider actively encourages diversity (EOS) and our external fund managers have the right fully represented at all levels of our organisation. expertise, policies, research and resources to carry out day-to-day stewardship activities on our behalf. See page 17 for more detail on how we thoroughly review our stewardship services provider and our fund managers’ capabilities within our appointment and monitoring processes. Training sessions and teach-ins for the Investment team have been provided on an ongoing basis. Our Talent & Development department is fully supportive of our investment sta昀昀 sitting ESG-speci昀椀c certi昀椀cations including the CFA Certi昀椀cate in ESG Investing and the recently-launched CFA Certi昀椀cate in Climate and Investing. Our Head of ESG participated in and passed the pilot exam for the latter quali昀椀cation in early 2022. Our Board and Executive Committee received dedicated training in autumn 2021 to expand their knowledge of climate change risks and how these can be monitored and managed through engagement and voting. Performance incentivisation We set performance incentivisation for both employees and external agents. For all our sta昀昀, performance is measured against a balanced scorecard of objectives covering business-as-usual activities, initiatives, and behaviours, the latter of which accounts for a speci昀椀c percentage of an employee’s annual performance assessment. This includes a review of an employee’s performance with reference to their core behaviours across our ICARE values (see page 8). We also have an investment directorate balanced scorecard with speci昀椀c RI and stewardship KPIs that the Investment team is measured on, as well as the culture assessment mentioned earlier on page 8.