28 Pension Protection Fund Responsible Investment Report 2021/22 Escalation and exercising shareholder rights As discussed, we look to company engagement as This year, we now have direct oversight of the voting execution across all our listed equity mandates. Our our primary approach to fostering greater social or segregated mandates are instructed through the EOS voting Voting against board service, and our pooled funds have been set up to enable environmental responsibility among the companies split voting for our allocation of shares. Together, this allows recommendations is an us to exercise our voting power and ensure much greater important tool as part of a and other assets we hold. If this does not achieve consistency in our strategy, in particular for any companies and issues with signi昀椀cant importance. thoughtful escalation when the hoped-for outcome, we turn to escalation, Reporting on our equity voting necessary. However, we would including voting. We have seen an improved level of transparency from our try to engage with the company equity managers on voting, as a result of our ESG quarterly reporting templates. In addition, the split voting set-up gives in advance. us direct access to voting platforms so that we can run How we approach escalation Where we feel engagement has not been fruitful our own reports. This means that for the 昀椀rst time, we can and voting over a reasonable period of time, we may vote against present an aggregated view of our voting activity across our management on certain resolutions, such as reports and equity mandates. Therefore, the following voting statistics When we escalate issues accounts or the election of individual board members are aggregated across both our segregated and pooled responsible for poor environmental or social performance. equity mandates, unless otherwise stated. Where an engagement is not progressing at a su昀케cient pace privately with a company, there are a range of For example, we closely follow the AGMs of companies How we voted over the year potential escalation strategies that we, or our external selected by Climate Action 100+ and discuss with EOS or agents, can employ. These include: our managers if there is an important vote to be cast on The following tables and charts detail our voting activity for our behalf. We are also reviewing the emerging Say-on- the period 1 April 2021 to 31 March 2022. • collaborating with other investors or campaign groups Climate trend for formal resolutions on companies’ climate • issuing a public statement transition plans or reporting. However, we recognise Voting statistics April 2021–March 2022 • 昀椀ling a shareholder resolution. the challenge that many shareholders are not likely to How many meetings did we vote at? 4,923 have the resources to fully assess the credibility and Voting against board recommendations is an important robustness of these plans. This could lead to shareholders How many resolutions did we vote on? 54,053 tool we can use as part of a thoughtful escalation when simply supporting management rather than encouraging What % of resolutions did we vote on for which 99.9% necessary. However, we would try to engage with the a company to be as ambitious as possible. This year, we were eligible? company at board or management level to discuss this we’re extending this to having conversations with the in advance. proxy advisors about their policies that inform their Of the resolutions on which we voted, what % 79.9% recommendations on Net Zero related votes. did we vote with management? Our voting approach for listed equities Of the resolutions on which we voted, what % 20.1% The PPF sees voting as an essential tool from a stewardship did we vote against management? perspective in supporting engagement and enforcing Of the resolutions on which we voted, what % 0.6% shareholder rights. We commit to voting every share we did we abstain from voting? hold, except when its cost is prohibitive or it is not possible Of the meetings at which we voted, what % did 67.4% to do so due to operational reasons (for example, due we vote at least once against management? to share-blocking markets or overly complex power of attorney requirements). Generally, we aim to align with the voting policy of our appointed stewardship services provider EOS, but we still review voting recommendations for signi昀椀cant votes or high-pro昀椀le ballots.