Responsible investment

Concern for our planet, for the communities we live in and those we have an effect on, through our choices as consumers, has grown over recent years. More of us are thinking about the wider affects of our interests, activities, and expenditure and whether they are having positive or negative influences beyond those we experience directly. We are becoming more conscious of the need for sustainability and this concern includes whether the provision we are making for retirement through our pension savings is being invested responsibly.

At LPPI a concern for sustainability informs how, where and what we invest in on behalf of client pension funds and how we act as responsible stewards and an active asset owner on their behalf.

We believe that:

Sustainable investment returns are achieved over the long term through an approach to stewardship which embraces responsible investment principles and practice.
Well-governed companies are best equipped to manage business risks and opportunities, and this contributes to achieving optimum risk-adjusted returns over the long term.

The consideration of Environmental, Social, and Governance (ESG) issues is embedded in our investment strategy and fully integrated into our day-to-day investment and stewardship activities. We strongly encourage good corporate governance and sustainable business practices in the assets we manage directly as well as via the actions of third-party managers we select to work with us.

We continuously hold ourselves up to scrutiny against appropriate standards of good practice.

Our responsible investment approach is designed to deliver against the commitments we have made as a signatory to the United Nations backed Principles for Responsible Investment.

Our services are fully aligned with the principles of the Financial Reporting Council's UK Stewardship Code.

Our responsible investment beliefs are a foundation for prudent investment management practices and are explained in our Responsible Investment Policy.

Long-term interests. LPPI has a fiduciary duty to act in the best long-term interests of clients and their beneficiaries.
Secure optimum returns. The objective of Responsible Investment is to secure optimum returns in the long-term at an acceptable level of risk.

We aim to effectively manage risks and opportunities on a sustainable basis. Environmental, Social and Governance (ESG) factors can have a material financial impact on the value of individual investments and an influence on long-term investment performance.

Ownership powers should be exercised to exert influence in circumstances where intervention is needed to protect the long-term financial interests of client pension funds.

Responsible Investment and ESG considerations are core to our investment process when:

Selecting investments (where we directly manage assets)
Selecting third-party fund managers (where they work alongside us)
Engaging with investees as part of the active ownership of pension fund assets.

The way we invest determines how we have ownership influence.

Directly owned assets typically provide us with a seat at the [board] table. This level of influence means we can actively encourage sustainable business practices and behaviours.

Assets owned through funds require a more collaborative approach. We, therefore, place a strong focus on evaluating, selecting and appointing appropriate external fund managers whose approach aligns with our responsible investment requirements and meet our core standards.