Strengthening Our investment Escalation Message from Key highlights our stewardship Our progress Our purpose approach and Our approach and exercising Our aspirations for 14 Pension Protection Fund Responsible Investment Report 2022/23 our Chair of the year commitment at a glance and governance incorporating ESG to engagement shareholder rights the coming year Appendices OUR PURPOSE AND GOVERNANCE CONTINUED Reviewing our processes and DWP review of the PPF assessing their e昀昀ectiveness In December 2022, DWP published the 昀椀ndings of its A recommendation made in the review is that the PPF departmental review of the PPF. Public bodies under the should take a higher public pro昀椀le and share more Our stewardship programme is subject to internal remit of government departments are often reviewed information on its approach to investment management, and external review, and is ultimately overseen by to provide assurance, ensure good governance, particularly in relation to its industry-leading commitment our Investment Committee. Policies, approaches and challenge their continuing need and e昀케ciency. to responsible investing. We have established a working and outcomes are presented quarterly to this We’re pleased that this recent review by the DWP has group to consider how the DWP’s recommendations can committee with action points recorded. Regulatory been positive. inform future strategy. developments are monitored to ensure that emerging themes and potential regulatory expectations are You can read the full report at Departmental Review of the evaluated. Externally, we participate in the Principles Pension Protection Fund (PPF). for Responsible Investment (PRI)’s annual transparency reporting and assessment process, which provides external validation of our RI and stewardship processes. In conducting this review, I have found the PPF to be a We also confer with our peers and industry stakeholders regularly and share our practices through various well-run public body o昀昀ering high standards of service forums. This year, the Department for Work and Pensions (DWP) instructed an independent review of and value for money to those who use it and pay for it. the PPF, including its activities relating to responsible investment. Please see opposite for the outcome of It is well-managed and well-governed and is highly this review. regarded by the full range of its stakeholders. Currently, the PPF Internal Assurance team does not explicitly review the work undertaken by the ESG & My recommendations are therefore limited in number, Sustainability team. However, in relation to external manager selection, pre-investment sign-o昀昀 must be focusing on areas where there is an opportunity to provided by the ESG & Sustainability team and this is then reviewed by the Operational Due Diligence enhance rather than a need to rectify. In particular, team and the Asset & Liability Committee before there is an opportunity for the PPF to share its good any investment can be approved. The ESG & Sustainability team undertakes an annual practice in certain areas more widely and an opportunity review of EOS’s services, our principal external for the DWP and the PPF to consider whether it and its stewardship services provider. A summary of this review is then provided to the Investment Committee. expertise can be used in other ways for public bene昀椀t. A structured internal audit process in relation to stewardship was initiated in 2022, but was postponed due to the portfolio restructuring. This process will continue in 2023. Lesley Titcomb, CBE, Lead reviewer of the DWP review of the PPF This Responsible Investment Report has been approved on behalf of the Board by the Chair of the Board and signed by the CEO following review by members of the Board and Executive Committee. It is informed by ongoing reporting throughout the year to the Board, Investment Committee, Asset and Liability Committee and monthly updates to the Chief Investment O昀케cer and Head of Investment Strategy.