Brunel Pension Partnership, one of eight UK Local Government Pension Scheme (LGPS) pools, and NEST, the UK’s workplace pension scheme set up by the government, have announced they will be voting against the reappointment of BP’s chair at its upcoming annual general meeting (AGM) on Thursday 27 April.
Faith Ward, chief responsible officer at Brunel, explained why: “We acknowledge BP’s ambition to be net zero by 2050 or before and the increased commitment to invest in solutions, but we are using our votes at the AGM to flag our concerns about the changes in strategy.”
She noted that there was no shareholder engagement regarding the reductions in commitments relating to oil and gas production – a material change to the plan presented to shareholders in 2022, and ”one that seriously imperils BP’s credibility as a company that will deliver on its promises”.
Ward added: “We believe that it is essential that we use our voting rights as investors to support collective action on systemic issues such as those raised, and hopefully this can lead to real world change.”
Diandra Soobiah, head of responsible investment at NEST, also expressed her disappointment: “Investing or saving money with a financial institution requires a certain level of trust between investors and the customers. In the same way, that level of trust is also needed between the investor and the companies we put our members’ money into. We want to be able to trust that our companies will do the right thing for their investors and step up to take responsibility for the impacts they’re having on the planet.”
Railpen-led investor group launches workforce directors guidance
Railpen, one of the largest pension managers in the UK, together with seven other investors with around £400bn (€452bn) in total assets, has launched practical guidance for companies on how to take a meaningful approach to including the worker voice at board level, including the potential use of workforce directors.
As well as exploring worker voice mechanisms more generally, the guidance provides insights into ‘what good looks like’ regarding the role, recruitment, and retention of workforce directors.
This coincides with the publishing of the investor statement, to which signatories managing around £400bn have signed up to so far, it was announced.
The guidance was created as a response to requests from some of Railpen’s portfolio companies for the investor perspective on workforce directors specifically.
It incorporates feedback from discussions with companies, investors, regulators, workforce representatives, and academics as to how companies can take a meaningful approach to considering appointing one or more board directors from the broader workforce.
A workforce director is a director of a company board that is drawn from the company’s wider workforce or employee base. Railpen’s definition does not consider the workforce director to be a representative of the workforce. Rather, they have the same set of fiduciary duties and stakeholders to consider as any other board director, but they also have current experience of being part of the firm’s broader workforce, the firm said.
Railpen, and others from the investor group, will engage with companies and their asset managers, where relevant, where it believes there is merit in considering or raising the issue of workforce directors, as well as with policymakers where it is felt that improvements can be made to create a supportive regulatory environment.
The guidance draws upon evidence that indicates there may be two main benefits for companies and investors from appointing one or more workforce directors:
- potential improvements to the cognitive diversity of a board, providing a particularly valuable perspective, with diverse boards more likely to make informed and effective decisions;
- helping workers to feel their voice is heard and acted upon, meaning they may be more engaged and motivated which in turn has financially material benefits for company performance.
Carillion completes buy-in deal with Just Group
The group trustees of the Carillion Group of the Electricity Supply Pension Scheme have completed a PPF+ buy-in dealworth £15m with Just Group.
The transaction secures the benefits of all members of the scheme comprising 33 pensioners and 89 deferred members at a level above Pension Protection Fund (PPF) compensation. The scheme will now move to buyout, it announced.
This PPF+ transaction follows the scheme entering the PPF assessment process in 2018 after the liquidation of its sponsor Carillion Group.
Vidett acted for the scheme, Osborne Clarke provided legal advice for the trustees and Aon was lead transaction adviser. Just Group was selected by Aon and the scheme trustees in a competitive process to ensure best value for members.
Prashant Mehta, business development manager at Just Group, said: “At Just Group we are demonstrating our flexibility to work with schemes of all sizes, from small complex transactions to larger transactions in the region of £1bn.”
Dominic Grimley, partner at Aon, said: “PPF+ transactions can be complex but by working closely with the trustees and the insurer, we have delivered a great result for the scheme’s members.”