The Environment Agency Pension Fund (EAPF) is part of the Local Government Pension Scheme (LGPS) and currently has assets of £3.7 Billion under management. The Fund manages this money through a number of investment and fund managers.
The Fund is part of one of the UK’s eight national LGPS pooled funds, the Brunel Pension Partnership (BPP), This has administrative benefits and enables greater scale in negotiating fee reductions or concessions with investment managers, and can explore more direct co-investment opportunities.
Ongoing responsibility and the selection of individual investments is undertaken by the investment managers and they operate at arm’s length from the Fund, with full discretion over the management of their portfolios, complying with statutory limits and the Fund’s Investment Strategy Statement. They also take due regard of our Responsible Investment policy and guidance.
The EAPF is a responsible investor and does not describe itself as an ethical investor; we’re long-term investors who aim to deliver a truly sustainable Pension Fund, ensuring that it’s affordable and delivers financially to meet the objectives of our scheme members, and that the money is invested responsibly.
Research suggests that investing according to guidelines, such as the UN Principles of Responsible Investing (UNPRI) and Environmental Social & Governance criteria, boosts returns for pension funds. The EAPF became the first LGPS signatory of the UNPRI in July 2006.
It’s important that we avoid conflicts of interest for our employers through the use of external Fund managers and it also gives us the flexibility to select the best managers for each set of assets. The skills needed to decide environmental and other issues vary from one asset class to another. We place a high importance in selecting good quality managers, who deliver financially and can manage the wide variety of risks.
We engage with the companies in which we invest to improve their performance and we believe that voting is an integral part of the responsible investment and stewardship process.
Our managers are delegated to vote all the Fund's shares at their discretion and we demand high standards in stewardship from our managers.
You can read all about this work, our policies, and our approach to investments on our Investments page