UKSIF response: Pension trustee skills, capability and culture: a call for evidence

We very much welcome the opportunity to respond to this call for evidence from the Department for Work and Pensions (DWP) and HM Treasury (HMT), given the critical role played by all pension scheme trustees in determining pension funds’ decision-making and safeguarding beneficiaries’ long-term future. Our response to the call for evidence emphasises the necessity for pension scheme trustees to have a greater depth and level of understanding and awareness of environmental, social, and governance (ESG) related risks and opportunities, which would help reduce schemes’ investment risks and drive long-term value for all beneficiaries.

Throughout our response, a core recommendation we highlight is for UK policymakers to consider, along industry and other actors, further clarification to fiduciary duty for UK pension schemes, specifically to better support trustees on how sustainability impacts and systemic-wide risks, such as climate change, nature loss and social inequalities, can be treated within the parameters of these duties. Should clarifying guidance and other steps be adopted, including industry-wide training on sustainability and fulfilling the role of trustees more broadly, this would support better investment decision-making among trustees and serve beneficiaries’ bests interests in the long run.

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