The Statement of Investment Principles is a formal document that sets out how the Plan’s assets are invested.
The Plan’s investments are held in a Common Investment Fund (CIF), which has its own Trustee, separate from the Plan Trustee Board. The CIF Trustee works closely with the Plan’s investment consultants to make decisions about the Plan’s investments, including drawing up a Statement of Investment Principles (SIP). This document sets out the Plan’s investment strategy and is available here.
The SIP also includes details of the Trustee’s policy statement in respect of ‘responsible investment’ and ‘ESG’. ESG stands for ‘environmental, social and governance’ and is simply a term for investments that aim to achieve growth while also having a positive impact on the environment, society or on the performance of a business.
While the Trustee has a legal duty to invest in the best financial interests of the Plan’s members, it aims to do this by being a responsible long-term investor. The Trustee believes that the way a company manages its environmental and social risks, such as its approach to climate change or how it treats its workers, can affect the long-term financial returns that it will make for its investors.
The Plan’s investment managers across all asset classes are required to take ESG factors, including climate change, into account when making investment decisions.
The Trustee also has to produce an annual Implementation Statement which describes how the policies set out in the SIP have been implemented. The Implementation Statement is available here.