Yesterday brought significant news for responsible investment in the UK with the final Government response to the 2017 Law Commission review on pension funds and social investment. There is also a linked DWPconsultation on trustee duties.
The key points are:
Pending the outcome of the consultation, all trust-based pension schemes need to do a new statement of investment principles (SIP) by October 2019 that must:
• state their policy in relation to financially material factors “including but not limited to ESG considerations (including climate change)”;
• state their policies on voting and engagement with investee firms, fund managers and other investors; and
• funds have to outline the extent to which member views are taken into account “including but not limited to ethical, social impact and present and future quality of life matters”
The DWP clearly expect the vast majority of funds to be considering ESG as a result since they say in the consultation that they expect exceptions to be “limited and focused on very particular circumstances- for example imminent wind-up”.