New DWP consultation is important step in tackling current ESG misconceptions, says PLSA

The Pensions and Lifetime Savings Association (PLSA) has today commented on the release of a new consultation on Clarifying and Strengthening Pension Scheme Trustees’ Investment Duties from the Department for Work and Pension (DWP).

Commenting on the consultation Caroline Escott, Policy Lead: Investment & DB, PLSA, said: 

“Today’s consultation is an important step in tackling the current confusion around how and when pension schemes should take Environmental, Social and Governance (ESG) risks into account in their investments. As long term investors, with £2.2tn assets under management, it’s crucial that schemes do consider these risks, and these proposals will help ensure trustees are clear on the distinction between when an ESG issue is a financial consideration or an ethical one.

“As stewards of members’ money it’s good practice for schemes to be mindful of members’ views, such as ethical beliefs, when shaping their investment strategies, however it’s vital that new rules do not blur the role and responsibilities of trustees. Any new requirements must be practical, and must not place any unnecessary burden or constraint on schemes, or create excessive costs. We look forward to responding to the consultation and continuing to work with the DWP and our members on this important issue."  

NOTES TO EDITORS

Background statistics 

•    Our 2017 Stewardship Survey found that:  76 per cent of respondents agreed that Environmental; Social and Governance considerations are financially material to their investments. 
•     71 per cent say they take stewardship factors into consideration when selecting their asset manager. 
•     Over half of respondents have taken steps to increase their stewardship activities in the past year. 

Source: PLSA Stewardship Survey 2017  

PLSA work in this area

• Impact Investing Made Simple – March 2018
• More light, less heat: a framework for pension fund action on climate change – December 2017
• ESG risk in default funds: analysis of the UK’s DC pension market – February 2017
• Each year the PLSA publishes an updated Corporate Governance policy and accompanying Voting Guidelines to highlight the key issues for schemes. In 2018 our guidelines were updated to reflect recent developments on climate risk.
• The PLSA also provides a forum for collaborative asset owner engagement on key issues or with key investee firms

ABOUT THE PENSIONS AND LIFETIME SAVINGS ASSOCIATION

We’re the Pensions and Lifetime Savings Association; the national association with a ninety year history of helping pension professionals run better pension schemes. Our members include over 1,300 pension schemes with 20 million members and £1 trillion in assets, and over 400 businesses. They make us the voice for pensions and lifetime savings in Westminster, Whitehall and Brussels.

Our purpose is simple: to help everyone to achieve a better income in retirement. We work to get more money into retirement savings, to get more value out of those savings and to build the confidence and understanding of savers.

PRESS CONTACTS

Robyn Margetts, Head of Media and PR, Pensions and Lifetime Savings Association
T: 020 7601 1726, M: 07713 073023, E: [email protected]

Kathryn Mortimer, Press Officer, Pensions and Lifetime Savings Association
T: 020 7601 1748, M: 07901 007 713, E: [email protected]