Coal Pension Trustees: ESG Policy in China Manager Selection

Coal Pension Trustees, one of the largest pension schemes in the UK, has been a pioneer in China capital market investment. Mark Walker, Chief Investment Officer of Coal Pension Trustees, talked about their ESG policy in China manager selection.

6 July 2020

Coal Pension Trustees, with an invested asset value of GBP 20 billion, is one of the largest pension schemes in the UK. Despite the pensioners were supported by fossil fuel industries in the past, ESG is getting higher and higher up the agenda, especially climate change and employee rights. Coal Pension Trustees has been a pioneer and leader in China market investment, with allocation to China private equity, off-share listed equity and recently China A shares, all through external managers.

Coal Pension Trustees共有200亿英镑投资资产,是英国最大的养老金计划之一。尽管该养老金的成员在过去收益于化石燃料类行业的发展,但该养老金对ESG的重视却与日俱增,尤其是气候变化和员工权利的保障。Coal Pension Trustees是投资中国市场的先行者和领导者,其在中国的投资包含私人股权、离岸中国股票,以及最近的中国A股,所有的投资都通过外部管理人完成。

What’s the ESG investment policy of Coal Pension Trustees? What do they expect from Chinese asset managers on ESG investing? What suggestions will they give to Chinese asset managers on ESG issues? ATC Initiative interviewed Mark Walker, Chief Investment Officer of Coal Pension Schemes.

Coal Pension Trustees的ESG投资政策是什么?他们对中国资产管理公司的ESG投资上有何期待?在ESG问题上,他们将对中国资产管理人提出怎样的建议? ATC Initiative采访了Coal Pension Trustees的首席投资官Mark Walker来分享他的观点。

Mark Walker, Chief Investment Officer at Coal Pension Trustee

ESG is getting higher and higher up the agenda. My members used to work underground, … despite their support clearly of fossil fuel industry in the past, but they still want to know what we are doing on climate change, particularly they want to know what we are doing in terms of supporting employee rights and those sorts of things.


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Q: Could you please briefly introduce British Coal Pension and your investment in China market?

您能否简要介绍一下 Coal Pension Trustees 以及您在中国市场的投资?

  • Our official name is The Coal Pension Trustees. Our pensioners are from British coal mine industry which disappeared 25 years ago;
  • We have two pension schemes with a total value of GBP 20 billion (USD 25 billion). We have a risk-seeking allocation partly due to the government guarantee. And the schemes have to turn the GBP 20 billion asset into GBP 40 billion future pension payment in the next 50-60 years;
  • For the investment in China, we started with private equity numbers of years ago, and then HK listed stocks. Last year we appointed two external asset managers to invest in China onshore A-shares;
  • The total amount of China exposure is between 3.5%-5.5% of the value of our total assets.
  • 我们的官方名称是Coal Pension Trustees。我们的退休人员来自25年前退出历史舞台的英国煤矿业;
  • 我们有两个养老金计划,总资产管理规模为200亿英镑(约250亿美元)。我们在资产配置上追求风险,部分原因是有来自英国政府的担保。我们需要在未来50至60年内将200亿英镑养老金资产转变成400亿英镑养老金给付;
  • 我们在中国的投资开始于几年前,最先投资的是中国的私人股权,然后开始投资香港上市的中国公司股票。去年,我们任命了两名外部资产管理人进行中国的A股市场的投资;
  • 我们在中国的投资占总资产管理规模的3.5%到5.5%。

Q: What is your responsible investment /ESG investment policy generally?


There are four elements of ESG policy:            

  • Sustainable investment belief: ESG impacts on financial return and risk;
  • Sustainable development goals and four strategic considerations, one of which is just transition to low carbon economy ;
  • We invest through external managers so we require our external managers to integrate ESG factors in their investment;
  • Stewardship is important: we require mangers to engage with portfolio companies while we also engage with invested companies directly through voting policies.


  • 可持续的投资理念:ESG对回报和风险的影响;
  • 可持续发展目标和四个战略考虑,比如其中一个战略考虑为向实现向低碳经济平稳过渡;
  • 我们通过外部资产管理人进行投资,因此我们要求外部资产管理人将ESG因素整合到他们的投资中;
  • “管家精神”很重要:我们要求资产管理人作为股东积极影响被投资公司ESG事务,同时我们还通过投票政策直接影响被投资公司。

Q: What is the difference between developed market and emerging market when applying ESG policy, especially in China?


  • There are clear differences between the developed market and emerging market on the ESG standards, policies, regulatory requirements and government interventions;
  • A higher return is needed to compensate the “weaker” ESG standards;
  • In China, elements about ESG may not the same with elsewhere, but the growth rate can be expected to more than compensate for the risks from ESG factors, and ESG factors are expected to be improved in China.
  • 在ESG的标准,政策,法规要求和政府干预几个方面上,发达市场和新兴市场之间存在明显差异;
  • 需要更高的回报以补偿“较弱的” ESG标准;
  • 在中国, ESG的相关要素可能与其他地方不同,但可以预见其增长速度将足以弥补ESG因素带来的风险,我们也期望中国的ESG因素可以得到改善。

Q: What do you look for in an emerging market manager that can demonstrate their ESG capability (organization structure, dedicated ESG team, written policies and procedures, etc)?


  • Look for the same thing in all external managers but take practical approaches and have a different expectation in different areas;
  • At the big picture level, we look at company culture, leadership, commitment to behaviour as long-term investors, etc. To me, these are particularly important;
  • At the detail level, as you can expect in a typical RFP, investors look for resource, team, processes that the manager has devoted to ESG.
  • 我们对所有的外部资产管理人员有相同的要求,但是要采取切实可行的方法,并且在不同领域还是需要有不同的期望;
  • 从总体上看,我们看重资产管理人的公司文化,领导力,以及进行长期投资的行为。对我而言,这些尤为重要;
  • 在细节上,正如您在典型的RFP中所能看到的那样,投资者需要了解资产管理人在ESG投入的资源,团队,以及相应流程。

If you, as a firm in mainland China, can take a competitive stance, and get an advantage in this area, I think it will go down very well with many fund selectors around the world.


Q: What level of engagement would you require a Chinese manager to have with their portfolio companies on ESG issue?


  • We manage engagement both by outsourcing to Hermes Equity Ownership Services and relying on asset managers themselves;
  • We hope both the third party and asset managers when they engage with the portfolio companies can drive a positive change not only to increase the return but also to help the businesses themselves to see focusing on ESG is quite a good thing to do.
  • 在参与被投企业ESG事务上,我们一方面将主要工作外包给Hermes Equity Ownership Services,同时也依靠资产管理人本身与其被投企业的互动;
  • 我们希望第三方和资产管理人在参与被投资的公司的ESG相关决策时,能够带来积极的变化,不仅可以为投资者增加回报,而且可以帮助企业自身更加关注ESG。

Q: How would you expect a Chinese manager to report to you their ESG practice?


  • Consistent standards would not be expected across the asset managers in the world;
  • We expect the reporting from all managers to have certain criteria including climate and align with our strategic considerations. And we hope to see the evidence that ESG has impacted investment decision-making process and the engaged company has changed the policy for the better.
  • Data availability, consistency about the data and the ability to report the in a timely way is still a challenge in the industry worldwide.
  • 世界各地的资产管理公司在ESG的报告方面都不会有统一的标准;
  • 我们希望所有资产管理人的报告都包含一定的标准,例如包括气候,并且希望可以符合我们的战略考虑。我们希望看到有证据表明ESG影响了确实影响了资产理人的投资决策过程,并且被投资公司也在ESG政策方面产生了更好的改变;
  • ESG数据的可用性,数据的一致性以及报告的及时性仍然是全球行业的挑战。

Q:  Do you have any suggestions for Chinese asset managers on ESG investing?


  • ESG is getting higher and higher up the agenda;
  • The ESG selection criteria set by fund selectors, would be not just “box-ticking” but ESG integration process focused;
  • If the firm in mainland China can take a competitive stance and get advantages in this area, that would make them stand out fund selectors around the world.
  • ESG在投资决策中的地位越来越高;
  • 基金筛选团队设定的ESG投资相关的筛选标准将从简单的“清单打钩”转变为更加重视投资管理人的ESG整合过程;
  • 如果中国的资产管理人在ESG领域提升竞争力,取得竞争优势,那将使他们在全球投资人面前脱颖而出。

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