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  • Investors representing £550bn ask Government for Statutory Clarification of Fiduciary Duty

    7 July 2014

    Statutory clarification of trustees’ duties in respect of ESG investment approaches would complement the excellent Law Commission report

    • Sustainable investment trade association supports Law Commission’s views on stewardship and how pension trustees should consider ESG factors
    • Law Commission says poor governance, environmental degradation and poor treatment of customers, suppliers and employees are financially material risks to investors and savers.
    • Law Commission asks The Pensions Regulator to give their guidance “exposure and authority”
    • Law Commission recommends Government review on whether trustees should state policies on stewardship.
    • UKSIF asks the Government to be prepared to go further to provide absolute clarity

    The UK Sustainable Investment and Finance Association (UKSIF) today co-ordinated a letter signed by investors from organisations with over £550 billion in assets under management to Vince Cable, Secretary of State for Business, Innovation and Skills, and Steve Webb, Minister of State for Pensions, urging the Government to take up the Law Commission’s recommendations on ESG and stewardship issues, while asking the Government to consider statutory clarification.

    Simon Howard, UKSIF Chief Executive, said:

    “We live in a world where issues such as climate change, resource depletion and human rights practices are coming under increasing scrutiny. It is therefore essential that the government gives absolute certainty to pension trustees that they can and should consider the full range of sustainable investment approaches necessary for the type of
    long-term decision-making that grows the value of beneficiaries’ assets.

    We were delighted with the Law Commission’s views that environmental, social and governance factors should be taken into account where financially material, and think the draft guidance they have provided will be tremendously useful. We would urge the Government to quickly push forward with the Commission’s recommendations, on stewardship and ESG issues.

    However, we believe that statutory clarification of some aspects of the law in line with the Law Commission’s views is still the most effective way to protect the public’s pensions and savings, and is a much stronger statement of the Government’s commitment to long-term investment. We therefore call upon Vince Cable and Steve Webb to consider statutory clarification to provide pension trustees with the greatest possible confidence to consider the full range of investment approaches.”

    List of signatories:

    Simon Howard, Chief Executive, UK Sustainable Investment and Finance Association

    Fouad Benseddik, Director of Methodology and Institutional Relationships, Vigeo Rating

    Paul Ellis, Chief Executive, Ecology Building Society

    Katherine Garrett-Cox CBE, Chief Executive Officer, Alliance Trust

    Peter Harrison, Head of Investments, Schroder Investment Management

    Nick O’Donohoe, Chief Executive Officer, Big Society Capital

    Ian Simm, Chief Executive, Impax Asset Management

    Steve Waygood, Chief Responsible Investment Officer, Aviva Investors

    Danielle Walker Palmour, Foundation Director, Friends Provident Foundation

    Peter Webster, Chief Executive Officer, EIRIS

    Rob Wylie, Chairman, WHEB Group

     

    Read the full press release here.

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