Strengthening Our investment Escalation Message from Key highlights our stewardship Our progress Our purpose approach and Our approach and exercising Our aspirations for 21 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 Engagement with issuers is a Asset class Owner of engagement Integration and stewardship approach fundamental pillar of our RI Primarily internally-managed assets strategy and the approach by Liability Driven PPF We engage with borrowers, primarily during reissuance or re昀椀nancing. We have less in昀氀uence with which we believe we can e昀昀ect Investment (LDI) sovereign debt, although we engage on market-level issues like LIBOR, RPI, and gilt issuance greatest change. We’ll always look UK Public Credit & PPF We engage with borrowers, more so around reissuance or re昀椀nancing to exhaust the engagement process Strategic Cash EOS EOS also covers these portfolios for engagement services before considering divestment UK Private Credit PPF We engage with borrowers, more so around reissuance or re昀椀nancing from a holding. External managers We engage with our external managers on their activities Primarily externally-managed assets How we engage Listed Equities EOS We re昀氀ect any concerns from our assessments in our voting and engagement approach We engage with issuers in a number of ways: directly, through our external External managers Managers can exert in昀氀uences on companies through voting and engaging with company management. agents, or through collaboration initiatives – when we consider it is in our Approaches will di昀昀er depending on whether managers follow high-in昀氀uence, systematic or active strategies bene昀椀ciaries’ long-term interests to do so. We expect boards of investee External manager monitoring. We also use intelligence from EOS’s engagements to inform our oversight companies to show responsibility, integrity, and independence. In cases of our managers’ activities where a company board deviates from principles of good practice, it should explain its reasons for so doing. Listed Credit: Corporate, External managers Managers can engage with borrowers, more so around reissuance or re昀椀nancing – less in昀氀uence with We prioritise engagement on those themes of greatest importance to us. As part sovereign, emerging sovereign debt of this, we work closely with our stewardship services provider EOS to de昀椀ne markets (EM) We monitor external managers’ own engagement practices and activities focus areas and provide feedback on them. More detail on our engagement approach was provided in our 2020/21 RI report and on our website. Absolute Return External managers Managers can engage, but with limited in昀氀uence in strategies with shorter holding periods However, there’s still a big need to boost transparency around engagement, We monitor external managers’ own engagement practices and activities especially in asset classes such as Sovereign Debt and Private Assets, both of which have great potential for positive impact. Over the past year, we’ve Real Estate External managers Managers with full control of assets can engage with tenants and local community continued to encourage improvements in these areas and supported our We monitor external managers’ own engagement practices and activities managers to engage with relevant issuers in their portfolios. Private Equity and External managers Managers can engage with companies or assets in primary funds, or with operating companies in Infrastructure EOS infrastructure, especially if they have board seats. We monitor external managers’ own engagement practices and activities We prioritise engagement on those themes EOS engages on our listed infrastructure holdings of greatest importance to us. As part of Alternative Credit External managers Managers can have ongoing dialogue with borrowers, but have limited control over management. this, we work closely with our stewardship We monitor external managers’ own engagement practices and activities services provider EOS to de昀椀ne focus areas. Secondaries/ External managers We monitor external managers’ own engagement practices and activities Fund of Funds