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

The following Pensions practice note produced in partnership with Mark Latimour 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?

FORTHCOMING DEVELOPMENT 1: According to a climate change strategy published by the Pensions Regulator (TPR), TPR is planning to publish guidance later in 2021, following engagement with industry, to help schemes comply with the TCFD regime to be introduced from 1 October 2021 and make consideration of climate change risks and opportunities part of their systems of governance. TPR will also 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.
FORTHCOMING DEVELOPMENT 2: On 24 March 2021, the DWP launched a call for evidence on the effectiveness of occupational pension scheme trustees’ current policies and practices in relation to social factors and how these are included in their ESG policies.

The DWP says that social factors can present a wide range of potential risks to a scheme’s investments, but they can also present lucrative investment opportunities. The aim of the call for evidence is to understand how trustees understand social factors, such as diversity, gender and female empowerment, how pension schemes can adequately consider

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