Transparency data

Homes and Communities Agency Pension Scheme — Annual Engagement Policy Implementation Statement

Updated 2 November 2026

Introduction

This statement sets out how, and the extent to which, the Engagement Policy in the Statement of Investment Principles (SIP) produced by the Trustees has been followed during the year to 31 March 2026.

This statement has been produced in accordance with The Pension Protection Fund (Pensionable Service) and Occupational Pension Schemes (Investment and Disclosure) (Amendment and Modification) Regulations 2019 and the Statutory and Non-Statutory Guidance published by the Department for Work and Pensions (DWP).

Investment objectives of the scheme

The Trustees believe it is important to consider the policies in place in the context of the investment objectives they have set. The objectives of the Scheme included in the SIP are as follows:

The main objective of the Trustees is to maintain sufficient future security within the Scheme to ensure the assets cover the defined benefits. Within the context of this objective, the Sponsoring Employer (Sponsor) wishes to minimise cash-flow variation between financial years as far as possible to within an acceptable range, and the Trustees wish to protect members’ benefits. The investment policy therefore reflects a balance between the following:

• a requirement to maintain a reasonable level of investment risk to keep the cost of the benefit accrual at an acceptable level
• a requirement by the Sponsor to be willing to make contributions to assist in the recovery of the funding level as required
• an acceptance by the Trustees that without a government guarantee to fund the Scheme, a continued exposure to equity markets implies members bear a significant part of any risk. However, as part of the 2020 actuarial valuation the Trustees have obtained an updated ‘letter of comfort’ from the Department for Levelling Up, Housing and Communities (DLUHC) (formerly known as the Ministry of Housing, Communities and Local Government (MHCLG) and now known as that again), which has confirmed that it will make sufficient resources available to the Sponsoring Employer to meet its pension liabilities as they fall due (including payments under the current and future Schedule of Contributions and to satisfy Section 75 debt requirements)

Review of the SIP

During the year to 31 March 2026, the Trustees reviewed and updated the Scheme’s SIP in June 2025 to reflect a reduction in the target allocation to equity from 20% to 15%, with a corresponding increase in the LDI target.

The latest SIP can be found online at: https://www.gov.uk/government/publications/homes-communities-agency-pension-scheme-statement-of-investment-principles

Policy on environmental social governance (ESG), stewardship and climate change

The Scheme’s SIP includes the Trustees’ policy on ESG factors, stewardship and climate change. This policy sets out the Trustees’ beliefs on ESG and climate change and the processes followed by the Trustees in relation to voting rights and stewardship.

In summary, the Trustees believe that good stewardship, environmental, social and corporate governance (ESG) issues may have an impact on investment risk and return outcomes, and that good stewardship can create and preserve value for companies and markets as a whole. The Trustees also recognise that long-term sustainability issues, including climate change, present risks and opportunities that increasingly may require explicit consideration. The Trustees have taken into account the expected time horizon of the Scheme when considering how to integrate these issues into the investment decision-making process.

To establish their beliefs, the Trustees undertook a review of their ESG ratings and beliefs facilitated by their investment consultant. The session facilitated a discussion of the Scheme’s investment beliefs with respect to ESG and provided further training on climate-related risk metrics. This training was first provided in August 2021. Following this, the Trustees undertook an additional review of their broader investment beliefs, including ESG beliefs, during 2022. As part of this review, the Trustees updated some of their ESG beliefs to reflect updated views and the policies currently in place.

The Trustees agree to take a proactive approach to understanding and managing the ESG risks within the Scheme’s portfolio. Work undertaken during the year relating to the Trustees’ policy on ESG factors, stewardship and climate change is set out below, together with how the Trustees’ engagement and voting policies were followed and implemented during the year.

Engagement

The Trustees recognise that by investing in pooled funds, their investment managers have full discretion when evaluating ESG factors, including climate change considerations, and exercising voting rights and stewardship obligations attached to the Scheme’s investments. This includes undertaking engagement activities, in accordance with their own corporate governance policies and current best practice, including the UK Corporate Governance Code and UK Stewardship Code.

In June 2025, the Trustees conducted an annual ESG review of the Scheme’s investment managers, in which they assessed the managers against their respective investment universe.

In June 2025, the Trustees conducted carbon metric analysis on the Scheme’s investments. Specifically, the report focused on Carbon Footprint, Weighted Average Carbon Intensity, and Absolute Emissions of each mandate compared to the benchmark. The report also covered key trends in terms of managers and mandates that were most carbon intensive, as well as specific stocks that were adding to the overall carbon footprint of the Scheme’s investments. This provided the Trustees with information to engage with the investment managers at review meetings.

In November 2025, the Trustees reassessed how well the Scheme is currently integrating ESG considerations into its investment decision making through the investment consultant’s Responsible Investment Total Evaluation (RITE) review. This considered the Trustees’ responsible investment beliefs, policy, process and portfolio against best practice and considered potential interventions to improve responsible investment integration e.g. implementing further allocations to strategies that have a greater focus on ESG, or those focused on biodiversity and nature, and the further development of stewardship policies and priorities. The output from this evaluation was also compared with the previous years’ results to assess how actions taken over the year have impacted the final score for the Scheme.

The Trustees have previously agreed that, where possible, for any new mandates implemented in the future, the manager’s approach to ESG considerations would be considered as a factor in the decision-making process. The Trustees also agreed that, where incumbent managers of the Scheme launch similar strategies with a greater ESG integration focus to the main strategy that the Scheme already invests in, the Trustees will assess the ‘ESG tilted’ strategy, including on risk and return and cost grounds, and decide whether to move to the alternative strategy.

The Trustees have reviewed their investment managers’ compliance with the principles of the UK Stewardship Code as part of this statement and will continue to do so annually. All the Scheme’s investment managers confirmed that they are signatories of the current UK Stewardship Code. The Trustees will continue to engage with all of their managers on the UK Stewardship Code and its relevance. All the Scheme’s investment managers confirmed that they are signatories of UN Principles for Responsible Investment.

The Scheme’s investment performance report is reviewed by the Trustees on a quarterly basis. This includes general ESG assessments from the investment consultant. The investment performance report includes how each investment manager is delivering against their specific mandates. Where a manager is not performing in line with expectations, the Trustees may invite the manager to present to the Trustees to understand the performance and outlook for the mandate.

The Trustees also requested details of relevant engagement activity for the year from each of the Scheme’s investment managers.

The Scheme’s managers provided examples of instances where they have engaged with companies they were invested in and, or, about to invest in which have resulted in a positive outcome. These engagement initiatives were driven mainly through regular engagement meetings with the companies that the managers invest in, or by voting on ESG-related resolutions at companies’ Annual General Meetings.

L&G

Over the year, L&G engaged with companies, regulators and policymakers. They see constructive engagement as the best way to deliver long-term and systemic change.

L&G have carried out 3,761 engagements across 368 meetings and calls and 3,393 emails and letters.

The company has made commitments to set targets to transition to net zero greenhouse gas emissions by 2050 or sooner, and to set interim targets for 2030, consistent with a 1.5°C trajectory. Under L&G’s Climate Impact Pledge, L&G have had in-depth discussions with the company on their coal policy, their scope 3 emissions and the sectors to which their 1.5°C alignment applies.

Oakhill

Over the year, Oakhill engaged (24 times) with underlying issuers on various topics including environmental, social and governance data collection.

For example, Oakhill engaged with a provider of safety, specialty and industrial services, whereby in Q4 2025, Oakhill met with the Company’s CFO and Treasurer to discuss 2025 sustainability priorities, focusing on energy efficiency and workforce safety. The management highlighted industry leading safety performance and initiatives such as solar-powered facility pilots and vehicle idling reduction.

M&G

M&G engage across corporate, governments, regulators and industry bodies. They seek positive change and impact from individual issuers and seek to improve market-wide or system risks (such as climate). Generally, their engagement activity is a blend of encouraging action (i.e. setting climate targets, improving transition plans, declassifying a board or improving board diversity) and additional or improved disclosures (scope 3, avoided emissions, decarbonization capex, human capital policies, responsible AI policies) where necessary.

For example, M&G had a meeting with the Sustainability Officer for an offshore energy company during the year to ensure that the Danish offshore wind specialist was advancing its approach to biodiversity given the potential negative biodiversity impacts of the offshore wind and their nature positive by 2030 target.

Insight

Over the year to 31 March 2025 Insight confirmed it conducted 2,762 engagements over 693 separate entities.

For example, Insight state that their engagements are focused on creating positive change at the organisations in which they invest. In determining the nature and objectives of an engagement relating to ESG factors, Insight adopt a ‘Double Materiality Framework’, whereby their approach is to categorise different themes to describe whether they have a greater impact in terms of their Financial Materiality or their Environmental and Social Materiality.

Insight engaged with an integrated oil and gas major as part of a collaborative engagement and focused on the credibility of the company’s climate strategy, emissions performance, and progress against investor expectations. This engagement made clear that the issuer remains engaged with investors and does not intend to weaken its stated climate commitments. However, it also highlighted the continued reliance on technological mitigation within a growing hydrocarbon portfolio and the absence of material progress against key investor objectives, particularly on Scope 3 emissions disclosure and methane governance. As a result, the collaborative initiative intends to continue engagement with the issuer focused on emissions coverage, transparency, and the long-term credibility of its transition strategy.

Significant votes

DWP released a set of Implementation Statement requirements on 17 June 2022, ‘Reporting on Stewardship and Other Topics through the Statement of Investment Principles and the Implementation Statement: Statutory and Non-Statutory Guidance’ to be adopted in all Implementation Statements for schemes with years on or after 1 October 2022.

The most material change was that the Statutory Guidance provides an update on what constitutes a ‘significant vote’.

A significant vote is defined as one that is linked to the Scheme’s stewardship priorities and themes. A vote could also be significant for other reasons, for example, due to the size of holding. Trustees are to include details on why a vote is considered significant and the rationale for the voting decision.

The Trustees define a significant vote as one which aligns with the broader Environmental, Social and Governance themes, narrowed down by size of holding (in particular, votes in relation to the top 5 holdings within the equity fund) during the period from 31 March 2025 to 31 March 2026. Due to the nature of the remaining Scheme assets (property and fixed income assets, excluding AVCs) significant voting activity is not expected across these assets.

Voting activity

The Trustees have delegated their voting rights to the investment managers. Investment managers are expected to provide voting summary reporting (where applicable) on a regular basis, at least annually.

The Trustees expect to be more active in challenging the investment managers in relation to voting and engagement in the future. It is expected that, when the investment managers present to the Trustees at future meetings, the Trustees will ask the investment managers to highlight key voting activity and the impact on the portfolio.

The Trustees do not use the direct services of a proxy voter.

Over the last 12 months the key voting activity within the equity mandates were as follows.

L&G — Future World Global Equity and Future World Global Equity Hedged

L&G were eligible to vote at 5,886 meetings over the year. There was a total of 60,906 resolutions on which L&G were eligible to vote.

L&G has participated in the vote for 99.9% of these resolutions.

In 79.0% of these, L&G voted in support of management, while voting against on 20.0% of the proposals and abstaining from 1.1%.

Of the top 5 holdings in the Fund (Apple, NVIDIA, Microsoft, Broadcom and Amazon), L&G participated in a substantial number of votes across each of the companies over the year to 31 March 2026.

L&G have shared information on the votes cast at the respective Annual General Meetings for each of these companies, along with their rationale, with examples shown below:

Apple — AGM on 24 February 2026 — L&G cast 12 separate votes largely covering Governance issues

Governance — L&G voted (against management) to not elect Director Andrea Jung. This vote against was applied as part of L&G’s escalation strategy as they have had concerns with the remuneration practices for the past year. A vote against was also applied as L&G expects the Chair of the Remuneration Committee to have served on the board for no more than 12 years in order to maintain independence and a balance of relevant skills, experience, tenure, and background.

NVIDIA Corporation AGM on 25 June 2025 — L&G cast 19 separate votes largely covering Governance issues

Governance — L&G voted (against management) against the election of director Tench Coxe. A vote against was applied because the director is not independent and sits on a Board Committee that should be comprised solely of independent directors. A vote against was also applied due to excessive tenure. Although L&G believes that there are circumstances when a long-serving director can add value, over time, the level of value can diminish and instead it may hamper board refreshment and oversight.

Microsoft AGM on 5 December 2025 — L&G cast 21 separate votes largely covering Social and Governance issues

Governance — L&G voted against (against management) the election of Director Satya Nadella, the vote against was applied as L&G expects companies to separate the roles of Chair and CEO due to risk management and oversight concerns.

Social — L&G voted against (with management) a report on the risks of operating in countries with significant human rights concerns. A vote against was applied as the company has improved its disclosures over the past few years, and the company discloses government requests for content removal and user data on its website.

Broadcom on 21 April 2025 — L&G cast 11 separate votes largely covering Governance issues

Governance — L&G voted against (against management) the advisory vote to ratify named executive officers’ compensation. A vote against was applied as L&G expects companies in climate critical sectors to have CEO pay linked to the achievement of climate targets to motivate the delivery of ambitious net zero aligned emission reductions targets. A vote against was also applied as L&G expects a sufficient portion of share incentive awards to be assessed against long-term performance conditions to ensure alignment of remuneration with company performance. The company awards are permitted to vest for below median relative performance which therefore fails the pay for performance hurdle. The company has also only set one performance metric to reward management for long-term performance. One metric does not by itself provide sufficient evidence of the overall long-term performance of the company. L&G expects all incentives to be subject to clawback if the vested award is later deemed to be unjustified.

Amazon AGM on 21 May 2025 — L&G cast 22 separate votes covering Environmental, Social and Governance issues

Governance — L&G voted (against management) against the election of Director Edith W. Cooper. L&G applied the vote against as part of their escalation strategies as they have had concerns with the remuneration practices for the past year.

Environmental and Social — L&G voted (with management) against reporting on risks of discrimination against advertisement buyers and sellers based on religious and political views. The board has current committees with relevant oversight responsibilities, and the company has implemented policies, also in the public domain, that provide sufficient information on use of its services and when the company may restrict or remove products or content.