Implementation Taskforce response to the DWP Consultation on Clarifying and Strengthening Trustees’ Investment Duties
We welcome the government’s commitment to supporting trustees to make long-term investment decisions in a way which positively impacts the environment and society. Fundamentally, we welcome this consultation on clarifying and strengthening trustees’ investment duties and we support all of the proposed changes in the consultation. It is worth highlighting that one of the recommendations from the Advisory Group report was that the DWP and the FCA should implement the five recommendations for government from the recent Law Commission report on pensions and social investment. We also welcome the reference to the work of the Advisory Group in this consultation.
Whilst welcoming the consultation, we have raised a number of specific observations/comments in our response. Our proposed amendments seek to clarify and strengthen existing regulations in a way which encourages more involved and forward-thinking conversations with advisers and throughout the investment chain but is also practical and not overly burdensome for trustees to implement. As institutional investors with long-term horizons, pension schemes’ goals are best served by investing in a sustainable way which meets the long-term pension needs of their members both through enhanced returns and through positive impact on society and the environment.
The Taskforce is very supportive of seeing additional guidance provided (as per the statement in the Consultation that “The Pensions Regulator will update existing Codes and guidance for both DC and DB schemes and will consider what additional guidance may be helpful for trustees in understanding their duties”). We would be happy to help with shaping such guidance.
Our full response to the DWP consultation, including more detailed responses to each question is available to download below.