Defined contribution (DC) master trust The People’s Pension (TPP) has raised the expectations on its investment mangers in its newly published responsible investment (RI) policy.

TPP’s RI policy outlines the minimum requirements and ongoing expectations that it has for its fund managers.

As part of the RI policy minimum requirements, TPP’s investment managers are expected to have a commitment to net zero and adequate stewardship resourcing.

The scheme’s trustee has warned that the relationship will be put under review if these minimum requirements are not met, which could lead to the scheme moving its members’ assets to other managers.

In its RI policy, TPP underlined its commitment to industry-wide sustainability groups, such as Nature Action 100 and Climate Action 100+.

Furthermore, the trustee set out objectives for its RI approach, outlining how TPP plans to use its scale and influence to support these objectives and the areas it has prioritised.

The trustee’s three stewardship priorities going forward are climate change, nature, and human rights.

TPP’s fund managers will be expected to support the scheme in achieving its emission reduction targets of: A 30 per cent greenhouse gas (GHG) emission intensity reduction by 2025 for its portfolio’s developed equities; halving its GHG emission intensity by 2030 for its growth assets; and net-zero GHG emissions by 2050.

The RI policy also included new net-zero voting guidelines, which TPP expects its fund managers to implement.

“Our new RI policy has both our members’ views and interests at its very heart,” said People’s Partnership, provider of TPP, head of responsible investment, Leanne Clements.

“With stewardship firmly under the microscope and the clock running down on critical issues such as climate change, now is the time to be bolder and braver in terms of what we expect of our fund managers.

“Gone are the days of ‘tea and cake’ engagement – what we want from our fund managers is evidence of a targeted approach to engagement, routed in a robust theory of change to achieve maximum impact.

“We want to see evidence that limited stewardship resources are being employed in the most effective way possible, and that fund managers execute robust voting escalation strategies.

“As an important complement to our portfolio construction approach on climate change, we recognise the need to achieve real-world emissions reductions in priority sectors through targeted engagement.”

TPP trustee board chair, Mark Condron, added: “The main objective is to drive better investment outcomes for our members and our stewardship objective is to encourage investee companies to behave in more responsible and sustainable ways.

“Hard-working pension savers expect asset owners such as us to ensure that their money is invested responsibly, and this report outlines how we are doing just that. Our approach is to ensure both financial value and resilience of our members’ savings, which is why the requirements we have of fund managers are so robust.”

---