Stuart O’Brien comments on ‘member views’ in ESG rules for IPE
Partner, Stuart O’Brien, comments on the Government’s shift on the requirement for trustees to take account of member views on non-financial matters, such as ESG, when developing their pension schemes’ investment strategy.
The DWP’s consultation in June 2018 on ‘clarifying and strengthening’ trustees’ investment duties in relation to environmental, social and corporate governance matters (ESG), had included a proposal for a separate statement on member views. The proposal saw opposition from most respondents to the consultation, including the PLSA.
Instead there will be an ‘optional policy’ on non-financial factors, including ESG and ethical concerns, and trustees will be required to state to what extent the policy has been taken into account, if at all.
O’Brien consider this, “a much more sensible position.” He adds: “It allows trustees to focus on the financial reasons for adopting an ESG strategy and avoids the introduction of potentially confusing obligations on trustees to consider purely ethical considerations.”
Read the full article on the IPE website here
Read Sackers’ response to the consultation here