ESG and stewardship issues in pensions—what do trustees need to do?
Produced in partnership with Mark Latimour of Eversheds Sutherland and Harriet Sayer of Eversheds Sutherland

The following Pensions practice note produced in partnership with Mark Latimour of Eversheds Sutherland and Harriet Sayer of Eversheds Sutherland provides comprehensive and up to date legal information covering:

  • ESG and stewardship issues in pensions—what do trustees need to do?
  • Meaning of ‘ESG’ and ‘stewardship’
  • ESG
  • Stewardship
  • Constraints on trustees’ investment powers when taking account of ESG and stewardship factors
  • Trust deed
  • Legislation
  • Trust law duties and case law
  • Recognition of ESG factors as financial factors
  • The Law Commission report
  • More...

ESG and stewardship issues in pensions—what do trustees need to do?

STOP PRESS 1: According to a climate change strategy published by the Pensions Regulator (TPR), TPR planned to publish guidance later in 2021, following engagement with industry, to help schemes comply with the Task Force on Climate-related Financial Disclosures (TCFD) regime introduced from 1 October 2021 and make consideration of climate change risks and opportunities part of their systems of governance. TPR was also to use its relationship supervision approach to encourage trustees to pay more attention to climate change in the building of portfolios and investment selection and to engage with their investment managers to ensure they steward investments in line with trustees’ policies and best practice laid out in the UK Stewardship Code.

On 16 December 2021 TPR published the final version of its guidance to help trustees of certain pension schemes meet tougher standards of governance and reporting in relation to climate-related risks and opportunities, together with its response to its consultation on the draft version of the guidance which ran between 5 July 2021 to 31 August 2021. Respondents to the consultation praised the guidance’s clarity, the helpfulness of the examples and that it struck the right balance between encouraging ambition and acknowledging the challenges trustees face.

As this is a new and developing area, not all advisers will

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