Pension scheme stewardship activity having positive impact on social and workforce factors

The Pensions and Lifetime Savings Association (PLSA) has published its response to the DWP consultation, ‘Consideration of social risks and opportunities by occupational pension schemes.’

Key points:

• The impact of Covid-19 on our working lives and a growing awareness of issues such as diversity and inequality have resulted in a greater focus on social factors by schemes. Three quarters (75%) of PLSA members surveyed plan to review their social policy within the coming year.
• Around half of schemes have actively undertaken engagement or stewardship on social factors in the past five years. One in five (20%) of our members surveyed have undertaken stewardship up to 20 times in the past five years, while a quarter have undertaken stewardship with an investee company on a social factor more than 30 times (24%).
• Of those who had, almost three-quarters feel that the stewardship activities have had at least a fair amount of impact (73%), with one in 10 saying they have had a great deal of impact (9%).
• Modern slavery, health and safety in supply chains, workforce conditions, and remuneration practices top the list of issues schemes are concerned about. The PLSA’s Worth of the Workforce discussion paper has also identified areas such as gender diversity, employment type, staff turnover, investment in training and development pay, ratios and employee engagement as being especially important to schemes.
• Data on company behaviour remains a significant barrier – two thirds of schemes do not feel that they have enough. Having previously reporting on this in our Worth of the Workforce and Hidden Talent reports, the PLSA has announced another research project this year to assess progress.

Joe Dabrowski, Deputy Director, Policy, PLSA said: “Social factors have always been prominent in the minds of pension schemes’ trustees and are a growing consideration amidst increased awareness of workforce matters since the Covid-19 emergency started. In a recent survey, 75% of PLSA members told us they plan to review their social policy within the next year, with almost a third planning on doing so within the next six months. We would expect the percentage of schemes with a specific social policy to continue to grow in the coming months and years.

“Even more encouraging is that pension schemes are increasingly exercising their responsibilities as stewards by engaging with investee companies and voting on resolutions. The majority who have done so say their action is having a positive impact.

“We are currently working with the CIPD, RPMI Railpen and the High Pay Centre to further explore which ‘S’ factors matter most to investors and how well FTSE 100 companies are disclosing against metrics related to their workforce.”

Read the full submission via the PLSA website.

Mark Smith, Senior PR Manager
 020 7601 1726 |  [email protected]k

Steven Kennedy, PR Manager
 020 7601 1737 | 07713 073024 | [email protected]