By Tom Dines
Fergus Moffat, head of public policy at trade body the UK Sustainable Investment and Finance Association, said: “There’s been a conflation of terms between what the law commission terms financially material and non-material factors.”
He said that often, “divestments are completely financially material”.
Moffat said the proposals allowing government intervention in pension scheme investment were “particularly dangerous”.
The law commission released a report on the fiduciary duty of investment intermediaries in 2014. It said while financial return should be a trustee’s primary concern, “the law is flexible enough to accommodate other concerns” and that “trustees may take account of non-financial factors if they have a good reason to think that the scheme members share a particular view and their decision does not risk significant financial detriment to the fund”.
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