Greater Manchester Pension Fund (GMPF), the UK’s largest Local Government Pension Scheme (LGPS) with total assets worth around £30bn, is customising its stewarship strategy by adopting pass-through voting, a significant step towards enhancing its responsible investment strategy.
Pass-through voting empowers pension schemes to enforce their voting preferences on annual general meeting (AGM) resolutions within their pooled-fund investments.
By using this technology, GMPF said it can now uniformly apply its voting policy across both segregated and pooled funds, allowing it to directly influence decisions on critical issues such as chief executive officer remuneration and climate change.
This was recently exemplified when GMPF, a member of Climate Action 100+, supported the resolution filed by Follow This at Shell’s AGM, urging the oil major to align its medium-term emissions reduction targets with the Paris Climate Agreement.
The adoption of pass-through voting by GMPF aligns with a growing trend among pension schemes, as evidenced by similar decisions from the £2bn LGPS for Camden and the £3bn Superannuation Arrangements of the University of London (SAUL). These moves signify a collective effort to harmonise voting policies across equities, ensuring that investments reflect the schemes’ responsible investment values, GMPF noted.
The scheme, a client of Legal & General Investment Management (LGIM), has partnered with fintech Tumelo to implement this voting capability.
Historically, GMPF’s segregated mandates were voted on according to its values through a policy managed by PIRC, while LGIM controlled votes for its pooled funds. The introduction of pass-through voting technology bridges this gap, providing GMPF with greater influence and consistency, it added.
Gerald Cooney, chair of the GMPF, said: “It’s great to see three of our partners, Legal & General, Tumelo and PIRC, working together to help us implement our voting policy across more of our investments. We continue to value the stewardship activities undertaken by LGIM beyond the votes. Implementing our voting policies will also give GMPF more influence and a stronger voice when we engage with portfolio companies.”
Georgia Stewart, CEO of Tumelo, added: “Pension funds are increasingly aware of their potential to impact the companies they invest in. Customising stewardship is crucial in amplifying this influence, ensuring investments reflect their goals.”
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