Railpen’s Caroline Escott explains how the multi-employer rail industry pension scheme approaches stewardship through collaboration on a range of governance and sustainability themes.
The latest debates by UK policymakers on fiduciary duty and responsible investment are bringing systems stewardship and system-level investing into sharp focus. The evolution in UK policy thinking saw Liam Byrne MP call for pension funds to formally consider broader systemic risks such as climate change and inequality, and prompted forthcoming statutory guidance from the government.
Across the industry, it seems like everyone is now talking about systems stewardship – a very welcome development as Railpen publishes its inaugural structured engagement plans for system-wide thematic priorities.
Railpen has long considered systems stewardship – guiding a complex and interconnected system to achieve positive system-wide financial outcomes – to be a core part of its investment philosophy.
As a universal owner with a portfolio spanning much of the global economy, Railpen has recognised for years that economy-wide risks cannot be diversified away. Climate change, pandemics and inequality impact everyone – and not least the financial outcomes for our members. It’s this reality that drives Railpen’s commitment to systems stewardship, which we continue to refine as markets and evidence evolve.
Our 2025 systems stewardship review, as outlined in our recent 2026-2030 paper ‘Investment Stewardship for Systems Change’, demonstrates that systems stewardship is not just something materiality-focused investors should care about, but something they must care about.
Taking a multi-phase approach
Our multi-phase assessment – prompted by shifting markets and evolving academic evidence – evaluated the new materiality evidence base, provided training and upskilling to colleagues across Railpen, and explored the art of the possible on regulatory frameworks and stewardship tools.
This culminated in March 2026, when we published our first structured engagement plans for our core thematic priorities to signal our expectations to the market and be transparent to stakeholders.
We have four headline themes that will continue to be the focus of our evidence-backed approach:
- Climate and nature
- Responsible technology
- Sustainable finance markets
- Worth of the workforce
Within those themes, we have identified both long-standing and new sub-thematic priorities to reflect new policy and industry developments, such as a focus on water, cybersecurity, and shareholder rights, for example, to make our engagement plans even more relevant and impactful.
“Systems stewardship is not a passing trend; it is the foundation of responsible investing in today’s interconnected world.”
Caroline Escott, Railpen
Railpen’s approach to systems stewardship will continue to be rooted in patience, consistency, and evidence – while financial outcomes remain at the heart of our work.
But our new approach also recognises that systems stewardship requires a mindset shift and an understanding of how issues and systems interconnect. A commitment to continuous learning and development is deeply embedded at Railpen, and we stepped up training for our Sustainable Ownership team and others across the wider investment business, better equipping them to diagnose systemic risks and identify effective intervention points.
This was followed by bespoke public policy training to help Railpen work with policymakers more effectively on key policy developments, such as the Modernisation of Corporate Reporting debate and the UK government’s Artificial Intelligence Strategy.
Better together
Collaboration, research and evidence will continue to underpin our systems stewardship work. Railpen is committed to working with others across the ecosystem to raise industry standards – particularly in our home UK market, where a generally supportive regulatory environment creates opportunities to shape global norms.
This includes setting up and leading groups like the Investor Coalition for Equal Votes, which represents $4.5trn of assets under management, the $2.5trn Workforce Directors Coalition, and the multi-trillion Governance for Growth Investor Campaign.
As part of this collaborative approach, company engagement remains important. Railpen will continue to target systemically important companies whose actions affect entire sectors and markets. By working with both laggards and leaders, Railpen will aim to raise both baselines and aspirations. And, while constructive and private dialogue is always preferred, we will make our case publicly when doing so benefits our members.
Railpen has long seen policy advocacy as an important stewardship tool. This will become even more true in the coming years, as traditional tools, including voting and shareholder engagement, are constrained by rollbacks in shareholder rights. Railpen will dedicate more resources to policy work, shifting from reactive to proactive engagement with membership associations and subject-specific campaigns, and leveraging our role as a major UK investor with 44% of our assets invested domestically.
Systems stewardship is not a passing trend; it is the foundation of responsible investing in today’s interconnected world. As fiduciary duty debates continue, Railpen’s experience shows that system-level investing is not only possible, but essential. We look forward to continued work with our peers to move beyond debate and into action, because the health of the financial system and the financial future of our members depend on it.
Caroline Escott is head of investment stewardship and co-head of sustainable ownership at Railpen.
