Paul Myles, Director, Institutional Business, BMO Global Asset Management.
Vicki Bakhshi, Director, Governance and Sustainable Investment, BMO Global Asset Management.
The government’s September 2016 statutory guidance on Investment Strategy Statements1 set out in more detail than ever before what is expected of the LGPS in relation to Environmental, Social and Governance (ESG) policies. Of the six sections of the guidance, two relate specifically to ESG – one in relation to how ESG fits into investment selection and monitoring, and one on stewardship activities.
All 89 England and Wales funds have now produced their new Investment Strategy Statements (ISSs) in line with the guidance, with all statements referencing ESG policies. But the story doesn’t end there. The guidance left space for interpretation – with the position further complicated by an ongoing legal challenge. The 89 statements vary widely in their position and level of detail on ESG policies, and many of the tough questions will only arise when it comes to implementation.