Responsible Investment

Responsible Investment (RI) Policy

The Hampshire Pension Fund is part of the Local Government Pension Scheme (LGPS). It is responsible for paying the pension benefits of over 200,000 current and future pensioners. The Pension Fund Panel and Board (PFPB), who are responsible for the management of the Pension Fund, have agreed an RI policy for the Fund's investments. This policy takes into account the views of scheme members and employers, including those who responded to the Pension Fund's RI consultation in 2022.

The Pension Fund believes that RI considerations are important, particularly over the longer term to protect and enhance long-term investment return and for its reputation with scheme members, employers and the wider Hampshire community. All RI considerations are important but the Fund views the impact of climate change as a key risk to the Fund and therefore its primary RI priority. 

  • The Pension Fund has committed to its investment having net-zero greenhouse gas emissions (which includes Scope 1, 2 and 3 emissions) by 2050 at the latest
  • The Pension Fund supports the objectives of the Paris Agreement to limit a global temperature rise this century to well below 2⁰C (which we take to be 1.5⁰C)
  • The Pension Fund Panel and Board have therefore agreed to actively work towards disinvesting from fossil fuel investments

What does working towards disinvesting mean:

  • In a small minority of cases where the Fund holds illiquid (such as private equity) fossil fuel investments, it will not immediately dispose of these investments, if this results in a poorer financial outcome for the Fund and its beneficiaries.
  • Fossil fuel companies still exist in investment indices and where the Pension Fund has chosen to invest in an index-tracking investments, it may still have exposure to fossil fuel companies. The Pension Fund will work with its investment managers on the options for index-tracking products that reduce their exposure to fossil fuel companies and/or follow 'Paris-aligned' objectives that reduce the overall carbon footprint of the investment.
  • It is important to note that Hampshire invests in partnership with other Local Government Pension Scheme pension funds (via the ACCESS pool) and therefore there must be collective agreement to changes to investment portfolios to exclude fossil fuels, which it is actively pursuing.

Where Hampshire can independently or with its partners, agree to exclude fossil fuel companies from its investments, it will typically be based on the following standard definitions of a fossil fuel company:

  • Fossil Fuel Production: Companies that derive +10% of revenue from the extraction & production of fossil fuels (oil, gas & thermal coal).
  • Fossil Fuel Ownership: Companies that own +10% of assets in fossil fuel reserves (coal, oil & natural gas).
  • Fossil Fuel Activities: Companies that derive +10% of revenue from oil & gas related activities including distribution, retail, equipment and services, extraction and production, petrochemicals, pipelines and transportation, thermal coal mining.

In the short-term, while the Pension Fund continues to hold fossil fuel related investments, it will continue to engage with the relevant companies through its investment managers, to promote the transition to a low carbon economy.

Responsible Investment Sub-Committee

To increase its capacity for the consideration of Responsible Investment issues the Hampshire Pension Fund Panel and Board has created a Responsible Investment sub-committee.

View meeting dates, agendas and papers for the Hampshire Pension Fund Responsible Investment Sub-Committee

Standards

We recognise our role to promoting best practice in RI and stewardship, which is consistent with our aim of seeking long term investment returns for the members of the Pension Fund. The Fund is a signatory or supporter of the following standards and initiatives within the investment industry that demonstrates its commitment to RI and the principles it will work to:

  • The Financial Reporting Council's UK Stewardship Code 2020
  • The United Nations Principles of Responsible Investment (PRI)
  • Taskforce for Climate Related Financial Disclosure (TCFD)
  • The Transition Pathway Initiative (TPI)
  • Just Transition
  • The Institutional Investors Group on Climate Change (IIGCC)
  • Pensions for Purpose
Reporting

The Pension Fund's annual update on its Responsible Investment activities (Published April 2024) - Hampshire Pension Fund Responsible Investment Update 2024

Hampshire Pension Fund Statement of compliance with the UK Stewardship Code (Published April 2024) - Hampshire Pension Fund Statement of compliance with the UK Stewardship Code 

TCFD report (Published April 2024) - TCFD framework

Voting

The Pension fund believes that voting as a shareholder is an important part of good stewardship as a responsible investor, to influence the way that companies are managed. In line with the principles of good stewardship the Pension Fund publishes the voting records for it investments, to demonstrate full transparency of its voting activity.

WS ACCESS Low volatility Fund
WS ACCESS Long Term Global Growth Investment Fund
WS ACCESS Global Stock Fund
WS ACCESS UK Equity Fund (CLOSED)
WS ACCESS Global Alpha Fund
UBS
Contact us
If you have any comments that you would like to share with the Pension Fund about Responsible Investment please email us at [email protected]