G7 commitment to decarbonisation of the economy only credible if the UK Government acts on fiduciary duty
The UK Sustainable Investment and Finance Association (UKSIF) today welcomed the agreement by G7 leaders on specific emission reduction targets over the next century, but warned that the UK Government must seize an imminent opportunity to ensure pension funds, invest in line with that commitment.
The 2014 Law Commission report Fiduciary Duties of Investment Intermediaries made it clear that when investing pension fund trustees should take into account financially material factors including environmental, social and governance (ESG) factors.
Following discussion of a DWP consultation on the report at an April meeting in London, financial service providers overwhelmingly called for regulatory changes to clarify the extent of the powers and duties of pension fund trustees in accordance with the Law Commission view. Such a change would be in accord with yesterday’s G7 statement and would show the new Government’s commitment.
Simon Howard, UKSIF Chief Executive, said “The G7 commitment to stretching targets in respect of COP 21 and emissions reduction before 2050 is essential. But, the exciting new commitment to decarbonisation by the end of the century is only credible if COP21 delivers.”
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