Page 1 Kawasaki Pension Fund Implementation Statement Year Ending 5 April 2022 Glossary BlackRock BlackRock Investment Management (UK) Limited ESG Environmental, Social and Governance Investment Adviser First Actuarial LLP Scheme Kawasaki Pension Fund Scheme Year 6 April 2021 to 5 April 2022 SIP Statement of Investment Principles UNPRI United Nations Principles for Responsible Investment
The Trustees have reviewed the extent to which their policy from the SIP relating to the exercise of rights (including voting rights) attaching to the investments was followed over the Scheme Year and this statement confirms the outcome of that review. In addition, the statement summarises the voting record of the Scheme’s investment manager and provides information on the significant votes made in respect of the Trustees' equity holdings. Information is also provided on the how the Scheme’s investment manager makes use of the services of proxy voting advisers
• When selecting a pooled fund, the Trustees consider, amongst other things, the investment manager’s policy in relation to the exercise of the rights (including voting rights) attaching to the investments held within the pooled fund.
• The Trustees will normally select investment managers who are signatories to the UNPRI.
• The Trustees invest in pooled investment vehicles and therefore accept that ongoing engagement with the underlying companies (including the exercise of voting rights) will be determined by the investment manager's own policies on such matters.
The Trustees' Policy Relating to the Exercise of Rights Summary of the Policy
The Scheme’s assets are invested in pooled funds and some of those funds include an allocation to equities. Where equities are held, the investment manager has the entitlement to vote.
• BlackRock Dynamic Diversified Growth Fund
The Trustees' policy in relation to the exercise of rights (including voting rights) attaching to the investments is set out in the SIP. The SIP complies with legislation which requires additional information to be stated about the nature of the arrangements in place with the investment manager. Part of the wording provides a detailed explanation of the Trustees' policy relating to the exercise of rights.
At the end of the Scheme Year, the Scheme invested in the following fund which included an allocation to equities:
A summary of the Trustees' policy in relation to the exercise of the rights (including voting rights) attaching to the investments is as follows:
• The Trustees believe that good stewardship can help create, and preserve, value for companies and markets as a whole and the Trustees wish to encourage best practice in terms of stewardship.
• When considering the ongoing suitability of an investment manager, the Trustees (in conjunction with their Investment Adviser) will take account of any particular characteristics of that manager’s engagement policy that are deemed to be financially material.
• If it is identified that a fund’s investment manager is not engaging with companies the Trustees may look to replace that fund. However, in the first instance, the Trustees would normally expect their Investment Adviser to raise the Trustees' concerns with the investment manager.
• The Scheme’s invested assets remained invested in pooled funds over the period.
*Note the voting analysis was over the year ending 31 December 2021 because this was the most recent data available at the time of preparing this statement. The Trustees are satisfied that the analysis provides a fair representation of the investment manager's voting approach over the Scheme Year.
Page 3 Has the Policy Been Followed During the Scheme Year?
• The investment manager used by the Scheme is UNPRI signatory.
• Since the end of the Scheme Year, an updated analysis of the voting records of the investment manager based on the period ending 31 December 2021* has been undertaken as part of the work required to prepare this Implementation Statement. A summary of the key findings from that analysis is provided below.
• During the Scheme Year no new funds were selected
• There has been no change to the Trustees' belief regarding the importance of good stewardship.
• During the Scheme Year, the Trustees considered the voting records of the investment manager over the period ending 31 December 2020
The Trustees' opinion is that their policy relating to the exercise of rights (including voting rights) attaching to the investments has been followed during the Scheme Year. In reaching this conclusion, the following points were taken into consideration:
Page 4 The Investment Manager’s Voting Record A summary of the investment manager's voting record is shown in the table below. TheseNotes voting statistics are based on the manager’s full voting record over the 12 months to 31 December 2021 rather than votes relating solely to the fund held by the Scheme. Use of Proxy Voting Advisers The Investment Manager’s Voting Behaviour The Trustees have reviewed the voting behaviour of the investment manager by considering the following: • broad statistics of its voting record such as the percentage of votes cast for and against the recommendations of boards of directors (i.e. “with management” or “against management”); • the votes it cast in the year to 31 March 2022 on the most contested proposals in nine categories across the UK, the US and Europe; • the investment manager's policies and statements on the subjects of stewardship, corporate governance and voting The Trustees have also compared the voting behaviour of the investment manager with its peers over the same period. The Trustees' key observations are set out below. For Against Did notvote/ abstained / withheld BlackRock 160,000 87% 11% 2% Splitofvotes: InvestmentManager Number ofvotes BlackRock Several Advisers Proxy advisers provide information but voting is determined by BlackRock Investment Manager Who is their proxy adviser?voting How is the proxy voting adviser used?
Based on the analysis undertaken, the Trustees have no material concerns regarding the voting record of BlackRock.
The Trustees will the voting actions of the investment manager of the Trustees of the Kawasaki Pension
Voting in Significant Votes
The five most significant votes in each of the nine categories based on shares held by the Scheme’s investment manager are listed in the Appendix. In addition, the Trustees considered the investment manager’s overall voting record in significant votes (i.e. votes across all stocks not just the stocks held within the funds used by the Scheme).
In last year’s Implementation Statement, the Trustees observed that BlackRock tended to vote in line with company management and that BlackRock’s voting record did not appear to be consistent with its public statements which had indicated a desire to address climate change issues. The position does now seem to have changed. This year’s analysis identifies a stronger tendency from BlackRock to oppose management and also provides evidence that BlackRock is using voting rights to tackle climate change issues. Furthermore, over the latest Scheme Year, the investment manager has generally been more supportive of shareholder proposals which were aimed at tackling ESG issues.
under review. ……………………………………………………………………….. Date: ……………………. Signed on behalf
Based on information provided by the Trustees' Investment Adviser, the Trustees have identified significant votes in nine separate categories. The Trustees consider votes to be more significant if they are closely contested. i.e. close to a 50:50 split for and against. A closely contested vote indicates that shareholders considered the matter to be significant enough that it should not be simply “waved through”. In addition, in such a situation, the vote of an individual investment manager is likely to be more important in the context of the overall result.
Description of Voting Behaviour
Appendix Page 6 Significant Votes The table below records how the Scheme’s investment manager voted in the most significant votes identified by the Trustees WhereNote the voting record has not been provided at the fund level, we rely on periodic information provided by investment managers to identify the stocks held. This means it is possible that that some of the votes listed above may relate to companies that were not held at the date of the vote. Equally, it is possible that there are votes not included above which relate to companies that were held at the date of the vote. Company MeetingDate Proposal VotesFor(%) AgainstVotes(%) BlackRock Audit & PHILLIPSReporting66 12/05/2021 RatifyErnst&Young LLPas Auditors 50 49 For ACTIVISIONBLIZZARDINC 21/06/2021 RatifyPricewaterhouseCoopers LLPas Auditors 54 43 For INTELCORPORATION 13/05/2021 Appointthe Auditors 38 61 For LABORATORYCORPORATIONOFAMERICA 12/05/2021 RatifyDeloitte &Touche LLPas Auditors 37 62 For INVESTECPLC 05/08/2021 InvestecLimited:ReappointKPMG Incas JointAuditors of the Company 71 29 For Shareholder Capital & Rights KERINGSA 22/04/2021 Authorize Capital Issuances forUse inEmployee StockPurchase Plans 32 68 For FERRARINV 15/04/2021 Issue Special Voting Shares 70 30 Against FLUTTERENTERTAINMENTPLC 29/04/2021 Issue Shares withPre-emptionRights 70 30 For/Abstain MONCLERSPA 22/04/2021 Authorise Share Repurchase 70 29 For BRITISHAMERICANTOBACCOPLC 28/04/2021 Issue Shares withPre-emptionRights 72 28 For Pay & AT&TRemunerationINC. 30/04/2021 AdvisoryVote onExecutive Compensation 48 50 Against INTERNATIONALBUSINESSMACHINESCORPORATION 27/04/2021 AdvisoryVote onExecutive Compensation 48 51 Against NETFLIXINC 03/06/2021 AdvisoryVote onExecutive Compensation 51 49 For CHIPOTLEMEXICANGRILLINC 18/05/2021 AdvisoryVote onExecutive Compensation 51 49 For ABIOMEDINC 11/08/2021 AdvisoryVote onExecutive Compensation 50 47 For Constitution of Company, Board & Advisers BERKSHIREHATHAWAYINC. 01/05/2021 ElectMeryl B.Witmer- Non-Executive Director 50 50 For SEAGATETECHNOLOGYPUBLICLIMITEDCOMPANY 20/10/2021 ElectJayL.Geldmacher- Non-Executive Director 50 50 For CORTEVAINC 07/05/2021 ElectJanetP.Giesselman- Non-Executive Director 50 50 For APPLEINC 04/03/2022 ElectAlexGorsky- Non-Executive Director 50 50 For D.R.HORTONINC. 26/01/2022 ElectMichael R.Buchanan- Non-Executive Director 50 50 For Merger, Acquisition, Sales & Finance HERMESINTERNATIONAL 04/05/2021 Approve Demerger 91 9 Against VINCI 08/04/2021 Issue DebtSecurities 92 8 For SAPSE 12/05/2021 Issue Bonds/DebtSecurities 93 7 For NATIONALGRIDPLC 22/04/2021 Approve Acquisition 95 4 For BANCOBILBAOVIZCAYAARGENTARIASA(BBVA) 17/03/2022 Authorize Issuance of Convertible Bonds,Debentures,Warrants,andOtherDebt Securities withoutPreemptive Rights 96 4 For Climate Related Resolutions TOTALENERGIESSE 28/05/2021 Approve the Company's Sustainable DevelopmentandEnergyTransition 83 7 For GLENCOREPLC 29/04/2021 Approve Climate ActionTransitionPlan 89 5 For NESTLESA 15/04/2021 SupportNestle's Climate Roadmap 95 1 For UNILEVERPLC 05/05/2021 Approve Climate TransitionActionPlan 99 1 For S&PGLOBALINC 05/05/2021 Approve Greenhouse Gas (GHG) Emissions ReductionPlan 88 0 For Other Company Resolutions TECONNECTIVITYLTD 09/03/2022 AllowProxySolicitation 62 38 For SSPGROUPPLC 04/02/2022 Meeting Notification-relatedProposal 79 21 For INVESTECPLC 05/08/2021 Investecplc:Approve Political Donations 80 20 For NCCGROUPPLC 04/11/2021 Approve Political Donations 84 16 For UNITEDAIRLINESHOLDINGSINC 26/05/2021 Approve TaxBenefits PreservationPlan 85 15 For Governance & Other Shareholder Resolutions APPLIEDMATERIALSINC 10/03/2022 ShareholderResolution:RighttoCall Special Meetings 49 49 Against COLGATE-PALMOLIVECOMPANY 07/05/2021 ShareholderResolution:Reduce OwnershipThresholdforShareholders toCall Special Meeting 51 49 Against APPLEINC 04/03/2022 ShareholderResolution: ReportonConcealmentClauses 49 49 Against QUESTDIAGNOSTICSINCORPORATED 21/05/2021 ShareholderResolution: WrittenConsent 51 49 Against THEGOLDMANSACHSGROUPINC. 29/04/2021 ShareholderResolution: Reportonthe Impacts of Using MandatoryArbitration 49 43 For Environmental & Socially Focussed Shareholder Resolutions CATERPILLARINC. 09/06/2021 ShareholderResolution:ReportonClimatePolicy 47 51 Against APPLEINC 04/03/2022 ShareholderResolution:CivilRightsAudit 53 46 For EXXONMOBILCORPORATION 26/05/2021 ImpactsShareholderResolution:IssueAuditedReportonFinancialofIEA'sNetZero2050Scenario 47 49 For TESLA INC 07/10/2021 ShareholderResolution:ReportonDiversityandInclusionEfforts 55 41 For AMAZON.COMINC. 26/05/2021 ShareholderResolution:OverseeandReportonaCivilRights, 44 55 For