Strengthening Our investment Escalation Message from Key highlights our stewardship Our progress Our purpose approach and Our approach and exercising Our aspirations for 31 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 APPROACH TO ENGAGEMENT CONTINUED Engaging through our stewardship services provider As explained earlier in this report, we use an external stewardship services provider, EOS, to engage and vote Engagement themes: Our stewardship process to achieve long-term sustainable returns on investment across our segregated Equity mandates and also engage with Public UK Credit and Cash assets. Our Stewardship Policy Governance foundation Management pillars Environmental outcomes details how we work with EOS, its four-step engagement milestone process to drive change at companies (see right), Business purpose, Climate change action and the full list of themes considered. strategy and polices Latest activity and themes Natural resource stewardship EOS focuses its stewardship activities on the issues that it believes have the greatest potential to deliver long-term Risk sustainable wealth creation for investors and positive eness management Circular economy and zero pollution environmental and societal outcomes. Currently it is focused v on six outcomes: environmentally, these are Climate Change ection and rights ecti Action, Natural Resource Stewardship, and Circular Economy & ot Zero Pollution. Societally, its focus is on Wider Societal Impacts, d e昀昀 Executive Wider societal impacts Sustainable Human Capital, and Human & Labour Rights – see right. or pr ar remuneration wealth creation Bo These six outcomes will be priorities for EOS. However, it also est v Human capital continues to maintain a comprehensive engagement plan In covering a broad range of other themes that generally lead Corporate to wider positive societal outcomes. These include: seeking reporting to avoid the emergence of ‘superbugs’ through anti-microbial Human and labour rights resistance; increasing resource e昀케ciency through the circular economy; and reducing all forms of harmful pollution. Social outcomes Summary of the EOS engagement milestone process EOS focuses its stewardship 4. activities on the issues that it believes have greatest potential 3. The company implements a strategy to deliver long-term sustainable The company develops or measures to address wealth creation for investors and 2. a credible strategy to the concern The company achieve the objective, positive environmental and 1. acknowledges the or stretching targets societal outcomes. Our concern is raised issue as a serious are set to address with the company at investor concern, the concern the appropriate level worthy of a response Progress Engagement with investee companies happens in stages, following speci昀椀c milestones. Engagement can often take place over a multi-year period, so milestones track progress that are related to objectives set at the beginning of our interactions, which can vary depending on the types of issues raised.