Our four sustainability goals

Our three priorities under our RI strategy are climate change, stewardship and transparency. From a thematic issue perspective, we give particular attention to climate change, D&I and modern slavery within our voting decisions.

We have seen significant progress in our managers’ own ESG practices, as evidenced by the growth over the last few years in the number of our external managers who have become PRI signatories (from 70 per cent in 2020 to 90 per cent at the end of 2022). We also engage with underlying issuers and use our voting powers to advocate for strong ESG and climate-related practices.

We recognise that by far the greatest impact of the PPF lies within our investment portfolio. As a major part of our sustainability strategy, we will continue to incorporate ESG and climate-related risks and opportunities into our investment process and stewardship activities, striving to demonstrate excellence in RI. We will also leverage opportunities to collaborate and lead by example within the pension fund and asset management communities.

We are proud to have high levels of employee engagement. In our most recent employee survey, 95 per cent of people agreed that the PPF makes a positive difference to the world we live in, and 87 per cent said they feel proud to work for the PPF. We make effective use of a number of communication channels including our intranet, Town Halls, office screens, newsletters, network groups and Employee Liaison Committee. We promote a ‘speak up’ culture, where employees are encouraged to share views and ideas, raise concerns and give feedback and we provide 25 channels for doing so. We make sure these are listened to, considered and acted upon where possible, by placing equal value on a ‘listen up’ culture. As well as being essential to our inclusive culture, it’s also essential to accountability and risk management. For example, this strategy addresses some human capital risks: focusing on employee engagement mitigates the risks of failing to attract and retain talented people.

We also consider our external reputation to be critical to our ongoing success. We work hard to build and maintain strong relationships with external stakeholders including our members, levy communication with these groups, we understand the issues that matter to them and our effectiveness in fulfilling our role. 

Community impact

We believe we can use our collective skills and experience to make a genuine impact in the communities and industries in which we operate. We have adopted a new Community Impact approach, replacing our previous CSR activities. We’ll encourage all our employees to use the five days annual volunteering leave available to them and we’ll create volunteering opportunities where people can use their skills and experience in different ways, with a focus on supporting underrepresented groups and the environment. Our people have also chosen a local charity to support, Lives Not Knives, where our employees’ fundraising and volunteering can make a real difference, particularly to our local community. 

We will build partnerships and volunteer with industry and local organisations that:

• Promote financial literacy and IT skills in the community
• Give us ways of boosting the pipeline of talent from underrepresented groups in the financial services industry and related professions
• Support the transition to Net Zero

Business ethics

We’re committed to maintaining high standards of corporate governance and review our compliance against the UK Corporate Governance Code and the HM Treasury/Cabinet Office ‘Corporate governance in central government departments: Code of good practice.’

Accountability and integrity are two of our core values, and high on our cultural agenda. Therefore, although the PPF is not currently a regulated financial institution, we emulate best practice as if we were regulated. We have adopted ethe Senior Managers and Certification Regim, implementing all aspects of the FCA’s accountability regime that are relevant to the PPF. We are therefore guided by the FCA conduct rules and the Seven Principles of Public Life.

Managing and understanding our opportunities, challenges and risks is critical to protecting our members and achieving our objectives. Effective risk management helps us not only to mitigate risk, but also to make the most of opportunities and take risk. It is integral to the delivery of our strategic plans, including this strategy. Risk identification and evaluation is a key part of our strategic and operational planning process. Our plans evolve in the light of consideration of the external landscape, our internal risk profile and our risk appetite. Managing risk on a day-to-day basis is embedded in all that we do. Our risk framework extends enterprise-wide to ensure a consistency of approach, language, assessment, reporting and escalation.

We have a Conflicts of Interests Policy to identify where a conflict of interest may arise and how conflicts should be monitored and managed. We’re committed to conducting business and our investment activities in the best interests of our beneficiaries, and have comprehensive controls across the organisation to prevent conflicts of interest from affecting them. We take all reasonable steps to prevent potential or actual conflicts of interest, or situations that might be perceived as giving rise to a conflict of interest.

Building Management

Includes heating, electricity, waste production, paper, and water usage in both our offices (Croydon and Cannon Street).

Procurement and supply chain

Includes our procurement of works, goods, and services and other supply chain activities.

ICT and digital infrastructure

Includes our information technology and digital services.

Travel

Includes employee business travel (air, rail and others) and encouraging employees to commute by more sustainable methods.

Operations

As we continue to build the picture of our usage and impact, we have been finalising a 2019/20 baseline of our environmental impact, as we stated in our Business Plan 2022/23. There may be improvements to be made on certain areas including paper usage, business travel and recycling but we have already had successes, such as using 100 per cent renewable electricity tariffs. This strategy provides an opportunity to engage and galvanise our people around our sustainability ambitions and this will include ways we can improve our use of resources in the office. 

We have also begun to make progress on reducing our environmental impact through the technology we use. For example, through our cloud migration we have moved away from energy and emissions-intensive data centres; and by encouraging our people to move to accessing their work accounts securely through their own phones, we’ve reduced the number of PPF phones by 72 per cent. 

The risks posed to the PPF, our members, levy payers and employees by the climate change emergency represent a serious external risk. Our approach to external environment risks is to recognise that our ability to control them or contribute to limiting the impact may be limited but we can monitor them and assess their potential impact on us. We’re committed to playing our part in the areas we can directly control and seeking to use our influence to encourage other organisations across the industry to do the same.

We will develop a Climate Change Adaptation Plan, which will include assessing the potential impact of physical risks of climate change on our operations and our resilience to these risks (long- term as well as acute). We’ll also conduct climate change stress tests in the Long-Term Risk Model, which we use to model future scenarios, including stress testing the impact on PPF’s own balance sheet.

We’ll assess the need for an Environmental and Social Management System to help with management and accountability of our operations and sustainability impacts.

Procurement and supply chain

Although our investment portfolio accounts for our biggest impact by far, we also aim to minimise our environmental footprint and increase the positive impact we have through our own supplier relationships. We aim to embed sustainability through our procurement processes and contract lifecycles, focusing on the same themes of climate change, D&I and modern slavery as our RI approach. 

In 2021/22 we piloted an approach to embed social value in our procurements, achieving positive outcomes, with bidders demonstrating actions they’re taking towards improving employee wellbeing, working with communities, social capital and the environment. We now consider sustainability in all our procurement strategies and assess ESG practices and commitments in many tenders, including the suppliers’ Net Zero commitment, carbon reduction plan, commitment to ESG reporting to meet TCFD requirements, and D&I reporting.

We will communicate our commitment to working with suppliers who share our commitment to sustainable business practices including: