UK to require pension fund statements on climate change and other ESG factors

UK to require pension fund statements on climate change and other ESG factors

The UK government has proposed making pension scheme trustees outline how they consider climate change when making investment decisions.

Pension scheme trustees will have to spell out in their statement of investment principles (SIPs) how they assess environmental, social and governance factors, including climate change, according to the government’s final response to the Law Commission report on issues of social impact and investment decisions.

According to the response, SIPs will have to include detail on their stewardship policies, including engagement with investee firms and the exercise of voting rights associated with an investment.

Trustees will also have to provide a separate statement on how they will consider members’ views on ethical, social impact, and present and future quality of life matters, in relation to the matters covered in the SIP.

Esther McVey, secretary of state for work and pensions, said: “These new regulations will empower savers all over Britain, ensuring that their voices are heard when their savings are invested.”

“As we see the younger generation who care more about where their money is going, they are also increasingly questioning that their pensions are invested in a way that aligns with their values. This money can now be used to build a more sustainable, fairer and equal society for future generations.”

Minister for sport and civil society, Tracey Crouch, said: “This is an exciting opportunity for social impact investment, giving pensions trustees a chance to have a resoundingly positive effect on the global issues that matter to savers.”

A consultation on clarifying and strengthening investment duties of pension trustees closes in July.

Categories: News, UK Pensions

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