Pension Funds and Social Investment – final government report

This morning, 18 June 2018, the Government published its final response to the 2017 Law Commission report on pension funds and social investment. The following information was published today by UKSIF (whilst I was working on our MiFID2 response*!):

• “The foreword is written by Guy Opperman MP, Minister for Pensions and Financial Inclusion, and Tracey Crouch MP, Minister for Sport and Civil Society. It notes the Government’s intention to take forward the Law Commission’s recommendations and announces a consultation from DWP on trust-based pensions with a view to implementing the changes by October 2019.Specifically this will mean a change to the law to require trustees ‘to consider the impacts on their investments from a changing environment, corporate governance and social trends’.
• In addition, trustees will be expected to have a policy on how they take account of members’ view, such as on social impact. In an equally significant move, the FCA has also announced it will also take forward and build upon the recommendations for contract-based pension schemes, by consulting on rule changes for Independent Governance Committees (IGCs), although this will not take place until next year.

This is hugely significant news which is likely to provide a huge boost for responsible investors in the UK. It represents a big win for UKSIF, our members and everyone in the responsible investment sector who has been campaigning on this issue over the past five years and longer.”

I would like to thank UKSIF for both its hard work in this area and also for circulating today’s update.  This has been a major piece of work and indeed is a big win for our sector.

My involvement in this was earlier in the process and I am delighted that the linked PFS guide references our Fund EcoMarket tool (as did the earlier government report) – as I had a number of meetings with contributors to the government report.

Next stop (for those who are interested!) please respond to MiFID2 consultation by 21 June 2018, this is a further major ESG / SRI milestone!

*see previous blog.

Further UKSIF comments.