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.
- Our one-page overview of ESG summarises what pension trustees should already be doing and what is on the horizon
- Chris Harper's video offers some thoughts on ESG considerations
- Listen to our webinar on practical considerations for pension trustees, which also includes an insightful talk by Marion Maloney of the Environment Agency Pension Fund
- Our flowchart sets out steps for an ESG manager to take in response to an allegation of a breach of the trustees' ESG policy
- Our #How2DoPensions quick guide on ESG provides a handy overview for pension trustees
- Our #How2DoPensions quick guide on TCFD reporting illustrates the statutory requirements for trustees of the largest pension schemes
- Our guide to setting a responsible investment strategy will be particularly useful for trustees of smaller pension schemes
- Clifford Sims’ blog post takes a look at the potential implications for pension trustees of a recent case involving charity trustees and their investment powers
- Kirsty McLean’s blog post takes a look at some Sharia law considerations for pension trustees and employers
- Clifford Sims’ blog on the Odey crisis takes a look at the potential impact that reputational risks can have on the value of an investment
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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