Environmental, Social and Governance for Pension Trustees

    View Author May 2022

    At one time, pension trustees might have taken into account environmental, social and governance (ESG) factors when setting their investment strategy, but they were not required to do so. The law around ESG investing continues to evolve, and now ESG issues (including climate change) are factors that trustees must take into account when setting an investment strategy, because the law classifies ESG factors as financially material considerations. The largest pension schemes must also undertake governance, reporting and disclosure in accordance with the recommendations of the Taskforce on Climate-related Financial Disclosures. In due course, it is likely that this obligation will extend to even the smallest of pension schemes. Meanwhile, the government is looking at what else can be done to encourage investment in green finance by large institutional investors, such as pension schemes, and the Taskforce on Nature-related Financial Disclosures is also developing a risk management and disclosure framework for organisations to report and act on nature-related risks. Our library of resources should help you to navigate what trustees must/could be doing in relation to ESG.

    ESG is just one of the topics we are covering in our #AttentionPensions campaign, aimed at helping pension trustees demystify the myriad pensions issues and obligations in a series of easily accessible short videos, quick guides and updates. Find out more.

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