The full report details how Railpen, on behalf of the Trustee, works to protect and enhance member outcomes through proactive and thoughtful stewardship. In addition to Railpen’s stewardship philosophy and approach, the report sets out the key developments, engagements and outcomes from across Railpen’s priority workstreams: Active Ownership, ESG Integration and Climate.
2024 report highlights include:
- Industry-wide stewardship on system-wide risks – Railpen recognises that combining its voice, influence and expertise with other investors and stakeholders whose interests align with its own, can make its engagement efforts more effective. In 2024, Railpen worked on a report ‘Cybersecurity Risk & Resilience: Guidance for Investors’ with Royal London Asset Management to help industry better understand the financial materiality and threat landscape of cybersecurity risk and provide practical guidance for investors as they engage with portfolio companies.
Similarly, in 2024 Railpen worked with the Chartered Institute of Personnel and Development (CIPD) and the Pensions and Lifetime Savings Association (PLSA) to write to the chief executives of the FTSE 350 companies with practical guidance on how to produce meaningful reporting on their workforce. The initiative, including its proactive and collaborative tone, was well-received by companies. Railpen, the CIPD and High Pay Centre will be following up on this and previous work in 2025 to assess companies’ disclosure practices and make recommendations to policymakers as they debate the UK Employment Rights Bill.
Railpen also continued to build on its previous work, advocating against changes to the UK listing rules, specifically the introduction of dual-class share structures (DCSS). Railpen believes that owners of capital should have a voice in proportion to their economic ownership, and the evidence shows that any benefits to firm value from DCSS decline only a few years after a company lists.
In response to the FCA’s 2024 proposals, which removed even the minimal shareholder safeguards that had been previously proposed in its 2023 consultation, Railpen leveraged its position as co-founder and chair of the $4.5 trillion Investor Coalition for Equal Votes (ICEV) to work with other domestic and international pension schemes to develop a coherent and clear position. This included support for asset owners and industry bodies with their responses and calculating the additional cost to investors and beneficiaries from the proposed changes, which was also included by the PLSA in its consultation response.
- Action to improve audit quality – Railpen believes a high-quality audit is vital to ensuring shareholders can obtain a fair and true assessment of a company’s financial health and stability. In 2024, Railpen worked with Governance Perspectives Ltd. to produce the Acting on Audit report, which identifies the main factors that affect audit quality and auditor accountability, and includes recommendations to policymakers, investors and companies to improve transparency, engagement and audit quality.
- Updating Railpen’s Global Voting Policy to protect shareholder rights – An emerging challenge is ensuring that shareholders’ voices continue to be heard as the regulatory landscape evolves. To help address this, Railpen updated its 2025 Global Voting Policy in December, emphasising its strengthened defence of shareholder rights in the wake of changes to the UK listing rules and the adoption of the EU Listing Act.
The revised policy also included new lines on how Railpen would consider voting against company plans to re-register or move to locations with weaker investor protections. Railpen distributed its updated policy to its priority holdings and, for the first time, to all FTSE 350 companies, given the need to urge UK companies not to follow UK policymakers in the ‘race to the governance bottom’.
Railpen also expanded its lines on audit issues in the 2025 Global Voting Policy update, stating it would hold companies increasingly accountable for mistakes or negligence and noting that it would look to engage with companies to encourage them to produce graduated reporting.
The report also includes several case studies on Railpen’s direct engagements with portfolio companies on material sustainability and governance issues last year. The business achieved positive results from its willingness to use the full array of stewardship tools at its disposal including AGM questions, co-filing resolutions, pre-declarations and exclusions engagement processes.
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