Responsible Investment
The combined assets of the Northern LGPS now stand at over £40bn. These assets are invested to fund the retirements of hundreds of thousands of beneficiaries who live both within the North and beyond. The Northern LGPS will always act in accordance the interests of those beneficiaries and we want our Responsible Investment activities to make a positive contribution to our region.
The Northern LGPS will provide democratic oversight, accountability and transparency whilst also ensuring that costs are kept low. Our structure also ensures that all investment strategy decisions are driven from bottom-up by the funds, rather than top-down by the pool. The Northern LGPS’s Responsible Investment activity is controlled by the funds themselves, is focused purely on our own assets, and will always have a regional dimension.
Environmental, social and governance (ESG) issues are important to the Northern LGPS for a number of reasons. ESG factors can be financially material and, as such, should be part of the assessment and monitoring of investments in all asset classes. Achieving sustainable, long-term financial returns underpins the ability to pay pensions. A focus on ESG issues helps reduce risks to the Pool and its beneficiaries. These risks might be financial, such as the underperformance or failure of an investee company, or reputational, resulting from poor corporate behaviour.
In addition, our beneficiaries live in a society that is affected by the behaviour of investee companies. Therefore we expect high standards from those businesses. Consistent with the Northern LGPS’s fiduciary duty to our beneficiaries we will ensure that the businesses in which we invest are both financially and environmentally sustainable, have high standards of governance and are responsible employers. As far as possible the Northern LGPS will seek to invest in a way that is financially and socially beneficial for the North of England.
