A shift away from pooled funds towards segregated, bespoke mandates has strengthened stewardship oversight across People’s Pension's £31.3bn portfolio, according to its first Responsible Investment (RI) report.

The UK’s largest commercial master trust claimed the move has given it significantly greater control over voting, engagement and exclusions, enabling closer scrutiny of asset manager alignment with its responsible investment priorities on climate change, nature and human rights.

As part of the transition, People’s Pension appointed Amundi and Invesco as core asset managers following an extensive review, with bespoke investment management agreements (IMAs) to embed enhanced requirements on net zero alignment, stewardship escalation, policy engagement, and reporting.

The scheme explained that this approach was designed to strengthen alignment between its responsible investment policy and how assets are managed in practice.

Indeed, the report showed that more than 80 per cent of the scheme’s growth assets have now been moved into climate-aware strategies, while almost half of the growth pool is aligned with targets approved by the Science Based Targets initiative.
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It also highlighted the scheme’s role in leading and co-leading several industry initiatives, including the Asset Owner Statement on Climate Stewardship, representing more than £1.2trn in assets, reflecting its “universal owner” approach to addressing systemic risks.

The People’s Pension Trustee Limited chair, Mark Condron, said the changes reflected a deliberate effort to raise standards across the investment chain.

“Earlier this year, we transitioned to asset managers who are more aligned to our responsible investment policy,” he outlined.

“We also took a leadership position in raising industry standards on climate stewardship. These achievements highlight what responsible investment leadership looks like: setting high standards, influencing corporate behaviour, and delivering sustainable outcomes.”

Indeed, the report provided detailed insight into how asset manager voting and engagement were assessed against the scheme’s responsible investment policy, with particular focus on climate-related director accountability, deforestation and shareholder proposal support.

It also underlined the importance of robust monitoring of managers, with misalignment on key stewardship priorities cited as a material factor in the decision to overhaul asset manager arrangements.

People’s Partnership stewardship manager, Cassandra Traeger, added that the scheme’s approach was increasingly focused on addressing market-wide issues rather than individual company engagement.

“As a universal asset owner, we recognise that our greatest impact is not on a company-by-company basis, but by addressing systemic issues that affect entire sectors and economies,” she continued.

“We believe this shift will deliver greater impact for our members than any individual company engagement or proxy vote could achieve on its own.”

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