Investing responsibly

Responsible investment is an integral part of our fiduciary duty, given its potential material financial implications.

As long-term investors in global markets, our investments impact the future of:

  • the global economy
  • environment
  • society

We take this responsibility seriously. We regularly examine the major environmental and social issues facing the world and work to ensure we actively manage these risks in our decision-making. 

We believe the financial system has a role to play in the transition to a more resilient and sustainable global economy. As participants in the financial system, we seek to:

  • invest in companies committed to building a better future
  • engage with issuers and other stakeholders
  • advocate for positive change

Responsible investment approach

Our Responsible Investment Policy sets out our approach to responsible investing. We provide annual updates on the responsible investment activities undertaken, either through:

The development of our approach to responsible investing is an ongoing process. Over time, as we develop our responsible investment analysis, capabilities and processes, the Pension Committee will review and update this policy to expand its scope.

We have identified the following four priorities for its responsible investment activities:

  • climate change
  • nature and biodiversity
  • human rights - including supply chain labour standards and slavery
  • good governance

Climate change

We have identified climate change as the single most important factor that could materially impact our long-term investment performance, given its:

  • systemic nature
  • potential effects on global financial markets

As such, we published a Climate Change Policy outlining our approach to managing the risks and opportunities related to climate change.

Our investment returns and the beneficiaries of the fund are reliant on a healthy, functioning global economy. Our interests are best served by:

  • achieving the 2015 Paris Agreement goal of limiting global temperature rise to 2°C or lower
  • pursuing efforts to limit any temperature increase to 1.5°C above pre-industrial levels

As part of our Paris-alignment, we are committed to transitioning our investment portfolios to net-zero greenhouse gas (GHG) emissions by 2050.

Each year, we publish an Oxfordshire Pension Fund TCFD report in line with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). The report provides an update on our:

  • climate related activities over the year
  • performance against our targets

Stewardship

Voting and engagement form an important part of our stewardship approach. Our engagement with LGPS Central, its appointed fund managers, and its engagement provider primarily follows LGPS Central's engagement policy. LGPS Central undertakes voting, utilising the expertise of its voting and engagement provider and appointed managers.

Initially, the focus for engagement is on listed equities and corporate bonds. These make up a large proportion of our investments and have more established processes and data to enable effective stewardship. Ultimately, engagement should extend to all asset classes.

We will have a better chance of meeting our responsible investment commitments by working in partnership with other like-minded organisations, such as: