Sustainability (SRI)

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Socially responsible investment beliefs

The incorporation of Socially Responsible Investment (SRI) in the Fund’s investment process has as its main objective the sustainability of the Fund, as well as contributing to the investment analysis and decision-making processes, which may increase the risk/return ratio in the long term.

SRI combines financial criteria with extra-financial, environmental, social and
good governance (ESG) criteria:

  • Environmental: This refers to environmental policies, external and internal management systems, as well as other environmental indicators (climate change, emissions, solid waste, water, etc.).
  • Social: Labour and human rights throughout the supply chain, as well as in behaviour towards customers and employees. It also includes issues such as diversity, animal rights and others. It also includes issues such as diversity, animal rights and others.
  • Good Governance: This covers the principles and rules that regulate the design, integration and functioning of corporate governance bodies. Principles of good governance, diversity in the management team, having codes of ethics, etc. Principles of good governance, diversity in the management team, having codes of ethics, etc.

In this regard, Pensions Caixa 30 F.P. approved in February 2018 the following eight beliefs with their respective SRI investment sub-beliefs that will serve as the basis for the SRI decision-making process:

Inclusion of SRI

The inclusion of SRI in the Fund’s investment process is primarily aimed at the sustainability of the Fund.

  • Sustainability should be integrated into all stages of the Pension Fund investment process.
  • Sustainability in investment goes beyond the consideration of ESG factors and includes the sustainability of the global economy or financial systems and markets.
  • It is essential to reflect the sustainability of the Pension Fund within the mission, vision and objectives of the Pension Fund.

Good Government

A high level of good governance enhances the effective achievement of SRI.

  • A culture of continuous and constant learning is important for effective SRI implementation.
  • It is important that the SRI policy, analysis and implementation capabilities of the Management Company are actively aligned with our beliefs and
  • SRI investment policy.

Measurable and quantifiable objectives

It is important that there are measurable and quantifiable objectives for the Pension Fund in terms of SRI.

  • The synergy of financial and non-financial factors in the analysis enables the Pension Fund to aim for better financial results and improves decision-making.
  • The inclusion of assets with good valuations increases the long-term risk/return ratio.

ESG rating

Monitoring ESG ratings should be as important as monitoring purely financial metrics.

  • The use of ESG monitoring indices complements the monitoring work.
  • SRI monitoring should include both the ESG assessment of the portfolio and the achievement of the various objectives of the Fund.

Investment principles

We will maintain our commitment as a signatory to the UN Principles for Responsible Investment (PRI) over the long term.

SRI and financial results

SRI makes sense beyond the possible good financial results that can be expected from its inclusion in the Pension Fund.

  • The benefits of incorporating ESG factors into the Fund’s investment policy outweigh the costs of implementing and monitoring them.
  • The inclusion of non-financial factors in the investment process improves control and reduces the overall risk of the Fund.

SRI implementation

The implementation of SRI in the Pension Fund will deepen wherever possible all available strategies.

  • The Pension Fund shall periodically review the sectors for which it exercises exclusions.
  • Thematic investing allows the Pension Fund to take advantage of its time horizon to benefit from long-term economic growth trends in economies.
  • Consideration in the fund selection process of standards-based analysis and consideration of ESG factors are important to the performance of the Pension Fund.

Collaborative engagement

The Pension Fund will participate in collaborative engagement initiatives with other Large Investors through different international platforms in coordination with the Management Company.

  • We will define the objectives we aim to achieve by collaborating in engagement initiatives and monitor them in coordination with the Managing Entity.
  • The Pension Fund will engage in actions with other Major Investors for the betterment of the industry.

SRI Activity Report

The pension fund makes available to interested parties its annual Sustainability Report, which reflects the most relevant actions of the pension fund in this area during the year.

Involvement policy

Introduction

The Control Committee considers that voting, involvement with the companies in which it invests and the monitoring of ESG (Environmental, Social and Good Government) / SDG (Sustainable Development Goals) factors are criteria of particular relevance in the management of the Pension Fund’s investments.

These policies are endorsed in the Pension Fund’s general investment beliefs, specific sustainability beliefs and the Pension Fund’s own Statement of Investment Policy Principles (SIPP).

The Monitoring Committee shall ensure that both the Management Company and the Managers through which investments are made take into consideration the monitoring of ESG factors in their investments.

As part of this monitoring, the following factors will be taken into account: a company’s corporate strategy, financial performance, risk (including those arising from Environmental, Social and Governance factors), capital structure and corporate governance.

In practice, this means that ESG considerations are relevant at all stages of the investment process and will be taken into account alongside implementation decisions in the Fund’s portfolio, whether through the Managers or live securities:

  • Selection: In due diligence processes and subsequent hiring of Managers or securities.
  • Monitoring: continuous follow-up activities on own ESG assessment, vote or interaction.
  • Divestment: Taking into account both purely financial and ESG metrics for divestment from managers or securities.

Commitment

Constructive engagement with the companies in which the Pension Fund invests underpins our aim to provide our constituency with a return in line with the investment objective proposed within the risk budget assumed, with the aspiration of making a positive impact with our investments. We will collaborate with the companies in which we invest when we believe it is in our collective interest to do so. We will collaborate with the companies in which we invest when we believe it is in our collective interest to do so.

We will engage with the companies in which we invest in a confidential and constructive manner through dialogue or engagement processes, with a focus on long-term sustainable management. Where we identify areas for improvement in the management of companies, we will engage directly with them through our Management Entity. Where we identify areas for improvement in the management of companies, we will engage directly with them through our Management Entity.

Possible actions to be taken would be:

Write to societies to highlight our concerns.

  • Talk to market regulators about our concerns.
  • Make a public statement, either individually or jointly with other investors.
  • To present resolutions at a general meeting of shareholders.
  • Use our right to vote to indicate our dissatisfaction.
  • Advising our managers to consider selling our shares in the company.

The Audit Committee believes that, in certain situations, working in partnership with other investors can be a very effective means of engagement. We work collectively on general Environmental, Social and/or Good Government issues through our participation in a number of formal and informal investor organisations nationally and internationally. Our participation in these organisations provides us with access to other investors and markets in order to maximise the impact of our initiatives. We work collectively on general Environmental, Social and/or Good Government issues through our participation in a number of formal and informal investor organisations nationally and internationally. Our participation in these organisations provides us with access to other investors and markets in order to maximise the impact of our initiatives.

In this context, the Pension Fund is involved in the following initiatives:

  • UN Principles for Responsible Investment.
  • Montreal Carbon Pledge.
  • Task Force on Climate-related Financial Disclosure (TCFD).
  • Thinking Ahead Institue (TAI).

The Monitoring Committee expects the Management Company and the Managers to have effective policies that address potential conflicts of interest when it comes to investment management and investment practices.

Scope of application

It is limited to shares of companies in which the Fund invests which are admitted to trading on a regulated market situated or operating in a Member State of the European Union.

Voting

Indirect Investment

By delegating the selection of companies to third party managers, the exercise of voting rights is also delegated. In cases where indirect investment is a practice in the portfolio of the Pension Fund, the ICPFM shall: In cases where indirect investment is a practice in the portfolio of the Pension Fund, the ICPFM shall:

  • Ensure that voting considerations are part of the manager selection process: the manager has a voting policy and exercises the vote of the companies in which it invests.
  • Analyse and validate that there are no areas of conflict between the voting policies of the managers and the voting policy developed in the direct investment section.
  • Periodically assess the voting direction of the portfolio and its alignment with the overall voting policy.

In addition, it is desirable that the EGFP promotes constructive dialogue with fund managers to ensure
a mutually beneficial relationship.

Direct investment

The exercise of voting rights is a key element of our asset-owning activities and an important link in the chain of responsibility between a company and its shareholders.

In this regard, the exercise will be carried out on the basis of the criteria and recommendations established by the proxy advisor selected by the EGFP: ISS (Institutional Shareholder Services group of companies).

These recommendations (see here) endorse the efforts made by global benchmarking organisations that promote best practices at the corporate level in terms of respect for the environment, labour standards, non-discrimination principles and protection of human rights.

In the areas of corporate governance, remuneration and corporate structure, recommendations are based on a commitment to value protection and value creation and to further develop best practice standards.

In addition, these recommendations stem from benchmarking initiatives such as the United Nations Environment Programme Finance Initiative (UNEP FI), the United Nations Principles for Responsible Investment (UNPRI), the United Nations Global Compact, the Global Reporting Initiative (GRI), the International Labour Organisation (ILO) Convention, the CERES Roadmap for Sustainability, and the European Union’s Environmental Directives.

Communication

An annual Report on the implementation of the Involvement Policy will be published, describing in general terms its behaviour mainly in relation to the exercise of voting rights.

This Report shall contain a section to reflect the voting behaviour at general meetings of companies in which the Fund has voted, although votes which are immaterial due to the purpose of the vote or the size of the shareholding in the company may be excluded from the Report.

Validity and modification

This policy of involvement will be public and will remain in force indefinitely, although it will be reviewed
annually and will be subject to modifications by the Fund’s Control Committee.
as many times as you agree.

NZAOA – Net Zero Asset Owner Alliance

In May 2023, PC30 joined the Net Zero Asset Owner Alliance (NZAOA), a United Nations convened initiative that includes the commitment of asset owners to achieve the transition of their portfolios to keep the temperature increase below 1.5ºC in comparison to pre-industrial levels. As part of accession, the Fund sets for the first-time intermediate targets to be achieved by 2030.

Our intermediate goals:

  • Reduce carbon intensity in equity and fixed income assets in at least 50% by 2030 (base year 2019), considering scope 1 and 2 emissions of the companies invested in.
  • Conduct dialogues with the managers of the funds in which the Fund invests about their climate strategies and about the companies in which the funds invest, focusing on the 20 companies that generate the most emissions (or on those responsible for 65% of emissions).
  • The fund is also committed to continuing to increase investment in low-carbon and climate-positive solutions, such as green bonds and investments in companies whose activities contribute to climate change mitigation and adaptation.

In addition, by joining the NZAOA, the Fund commits to be aligned with the alliance’s positions on financing activities with the highest climate impact, such as thermal coal, oil and gas.