A £2.3bn local government pension fund has become the latest to adopt pass-through voting in a bid to exercise greater influence over its investments in pooled funds.
Southwark, which is part of the London CIV Pool, announced today that it has implemented pass-through voting on its holdings with Legal & General Investment Management (LGIM) and BlackRock, the former supported by Tumelo’s ProxySphere voting technology.
Southwark was one of the first LGPS funds to scale back its fossil fuel holdings, having pledged in 2016 to reduce its exposure to the industry. It now aims to become net zero by 2030, in line with the council’s ambitious target.
LGPS funds tend to invest much of their public market assets through pooled vehicles, which has historically limited their ability to exercise voting rights over individual holdings.
Pass-through voting enables investors in pooled funds to cast votes at AGMs for individual investee companies.
Clive Palfreyman, strategic director of resources at Southwark, commented on the decision: “Pass-through voting gives us a huge opportunity to make sure Southwark’s voice is heard on key issues that are important to us, like our commitment to tackling the climate emergency. Previously, we were forced to accept the policies of fund managers when voting, but through Tumelo, L&G and BlackRock, we can now implement our own voting policies, giving us more influence when engaging with companies in our pooled funds. It’s another tool for us to use when tackling the climate emergency, and complements ongoing work through our pooled fund, which is focused on decarbonisation and reaching net zero.”
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By opting for pass-through voting, Southwark follows in the footsteps of other LGPS funds including NESPF, the Camden Pension Fund, and Bedfordshire, as well as the LGPS Central pool, who are among the early adopters of this approach.
Edd Micklem, global head of partnerships at Tumelo, welcomed the new commitment:“Pension funds are increasingly aware of their potential to influence the companies they invest in. Customising stewardship strategies is crucial to amplifying that influence and ensuring investments reflect their goals. As the stewardship landscape grows more complex, Tumelo is helping managers to adapt by offering tailored voting options.”
