Welsh pool launches responsible investment policy

The Wales Pension Partnership (WPP), the pooling entity for the eight Welsh Local Government Pension Scheme (LGPS) funds, has announced a new responsible investment (RI) policy, highlighting its commitment to responsible investment and desire to be a leader in this area.

The new overarching policy was developed collaboratively by the WPP and its eight constituent authorities and will be adopted by all. At the same time, it will allow individual constituent authorities to maintain and develop their own RI policies.

Chris Moore, director of corporate services from the WPP host authority, said: “Responsible investment policies are vitally important not only to the administration of our funds but to the future of Wales.” He recognised how crucial it is for the WPP to establish its own RI policy and said the pool aimed to ensure that all its constituent authorities were represented in the policy’s development.

Building support and gaining consensus among the constituent authorities is imperative, Moore continued. “We needed to be sure that the policy was representative of the broad range of investment beliefs within the pool.”

In its new RI policy, the WPP has agreed to prioritise several actions over the next 12 months, including developing a specific climate risk policy and engaging with its investment managers to develop an appropriate set of RI monitoring metrics.

WPP’s constituent authorities include pension funds for Cardiff & Vale of Glamorgan, Clwyd, Dyfed, Torfaen, Gwynedd, Powys, Rhondda Cynon Taf, and City and County of Swansea.

WPP was established in 2017 and has a long, successful history of collaboration, including examples that pre-date the government’s pooling initiative. Its operating model is designed to be flexible and deliver value for money. It appointed an external operator – Link Fund Solutions – and makes use of external advisers to bring best of breed expertise to support the running of the pool. The operator has partnered with Russell Investments to manage the pool’s investments and assist in the reduction of investment management costs for all the constituent authorities.