The requirement for ESG factors to be considered when making and managing pension scheme investments is one that is becoming increasingly important, required and complex.
There is a requirement for ESG considerations to be reflected in the Statement of Investment Principles as well as trustees' voting behaviours to be set out in an Implementation Statement.
In addition, trustees of certain pension schemes must comply with governance and disclosure requirements in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
The obligations in this area are going to develop as investors, pension scheme members and policy makers become increasingly concerned with ESG and stewardship.
How we can help
The Stephenson Harwood pensions law team is at the forefront of ESG developments and can offer support to both sponsors and trustees in relation to their requirements in this field. We are aware that this area can sometimes seem overwhelming and everchanging and we are able to provide simple and easy to understand advice so that our clients are aware of their obligations and options in this area. In particular, we can:
- Ensure your statement of investment principles is legally compliant
- Assist with producing the implementation statement
- Advise on the new obligations relating to the TCFD regime
- Advise trustees so they are prepared once the requirement for the Own Risk Assessment under the Pension Regulator's draft Single Code of Practice comes into force. ESG will play a key role in this assessment.
- Advising a major energy supplier on the pension disclosure obligations applicable to its investors.
- Advising a number of major UK pension schemes on compliance with disclosure requirements relating to ESG.