The Church Commissioners for England has announced it will begin to vote against companies that fail to meet its expectations on human rights. The efforts support the Church Commissioners’ responsible investment focus on ‘Respect for People’.

As a leading responsible investor, the Church Commissioners will use its vote as a shareholder to ensure international human rights norms are respected by the companies in which it invests.

Starting in 2023, the Church Commissioners will vote against the re-election of relevant directors in companies that fail to meet its expectations on human rights.

This includes directors with named responsibility for human rights, or board chairs, who are up for re-election in 2023 annual general meetings.

The Church Commissioners will also work with data providers and proxy advisors with the aim of expanding the assessment of companies, improving transparency for the market overall.

Dan Neale, social themes lead for responsible investment at Church Commissioners for England, said: “We expect companies in which we invest to be actively committed to prevent, mitigate and account for human rights risks and impacts in all their activities. This includes managing issues like discrimination, modern slavery, indigenous people’s rights and community impacts.”

He added: “We will use our vote with discretion, when we think it’s appropriate to signal our disapproval to the management of a company that do not appear to meet our expectations of responsible business conduct with regards to respect for human rights.”

Neale said that respect for human rights underpins the ‘S’ in ESG, and called on all companies to manage their social risks and impacts, to improve both outcomes for people and long-term enterprise value.

BlackRock’s DC default strategy LifePath UK adopts formal ESG policy

BlackRock has announced that its £9.2bn LifePath UK investment strategy has formally incorporated an ESG policy, which includes a climate objective and other sustainable related objectives, into its fund prospectus.

Launched in 1997, BlackRock’s LifePath UK strategy is a series of target date funds (TDFs), providing members with broad and diversified access to 11 asset classes invested through low-cost, transparent index funds.

The addition of a formal ESG policy is a continuation and evolution of LifePath UK’s ESG journey, which began in 2019, and reflects scheme members’ requirements for sustainable objectives alongside evolving pension regulation, the firm said.

For each LifePath UK vintage, the update includes the aim to:

  • achieve an absolute reduction of 50% in carbon emissions intensity by sales over a 10-year period (starting from July 2019);
  • achieve a lower portfolio carbon emissions intensity by sales relative to a Reference Comparator (composite non-ESG benchmark);
  • invest a minimum of 80% of the assets held in corporate issuers in ESG screened/optimised strategies;
  • invest a minimum of 80% of the assets held in sovereign issuers in strategies with an ESG sovereign rating of BB or higher;
  • provide additional flexibility to invest in non-index funds.

These changes aim to provide pension schemes and their members with greater transparency on how LifePath is managing ESG risks and the measurement of climate objectives, BlackRock said. 

Sarah Melvin, head of UK at BlackRock, said: “The formal adoption of an ESG policy in our LifePath UK strategy reflects BlackRock’s commitment to listening to our clients and providing sustainable solutions that meet their expectations. The update further enhances LifePath as a leading default strategy for the UK DC market, and we are excited to strengthen BlackRock’s efforts to help our clients navigate the transition.”

LifePath UK takes a whole portfolio approach to integrating sustainability, with considerations made throughout the investment process – across investment research; strategic asset allocation design; vehicle selection; and company engagement.

Any related portfolio changes are made whilst ensuring the primary goal of delivering retirement outcomes for members is maintained, the firm noted.

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