Environmental, Social and corporate Governance (ESG) factors in pension scheme investing have risen to prominence and continue to dominate headlines.

Our experts are at the forefront of the debate and are involved in a number of industry groups and initiatives. We have been advising on trustees’ legal duties with regard to financial and non-financial factors, including ESG, ‘socially responsible investing’ and ‘ethical’, ‘impact’ or ‘green’ investing for a number of years.

The DWP published its response to consultation on changes to the Occupational Pension Schemes (Investment) Regulations 2005 (“the Investment Regulations”) in September 2018.  Trustees will need to revisit their Statement of Investment Principles (SIP) to ensure they remain fit for purpose, as from 1 October 2019 they will be required to set out how they take account of financially material factors and stewardship, including but not limited to, environmental, social and governance (“ESG”) factors, including climate change.  For full details of the updated regulations see our Alert.

Our latest guide for pension trustees, Where next for ESG? considers how trustees’ duties are evolving and what we expect to see on agendas in the coming year, as well as taking a critical look at the fiduciary duty and how it applies to different types of schemes.  It also recaps on some key developments over the last few years and provides a map to navigate the sometimes bewildering number of acronyms, jargon and organisations that crop up in this area.

*Use this link to download a printable version of Where next for ESG?

Our first guide – A practical approach to ESG published in 2016, looked at how trustees could incorporate ESG into their investment strategies and their legal duties, and considered stewardship, the duty of care and member concerns and complaints.

Recent experience

  • Advising a large UK pension scheme on development and implementation of ESG strategy in relation to their DC default fund
  • Assisting 7 of the 25 largest UK DB pension schemes with their responses to letters from the Environmental Audit Committee
  • Advising trustees on how to incorporate ESG in to their Statement of Investment Principles (SIP)
  • Delivering training on fiduciary duties and ESG factors to a number of pension scheme trustees and providers
  • Advising a social investment group on issues for DC funds investing in socially responsible funds to inform their response to the 2016 Law Commission consultation
  • Assisting prominent schemes in responding to member / pressure group queries.