A new pensions taskforce looking to help schemes address social issues has been welcomed by the industry.
Last week UK pensions minister Guy Opperman (pictured) announced the formation of the taskforce aimed at supporting pension scheme trustees and the wider pensions industry with some of the challenges around managing social factors, including the identification of reliable data and metrics, in response to the UK government’s recent call for evidence on the issue.
The responses to the government’s Consideration of social risks and opportunities by occupational pension schemes call for evidence highlighted the need for a proactive approach to embedding social factors within pension schemes’ investment decisions and stewardship policies, the department for work and pensions said.
“Financially material social factors pose risks and provide opportunities to schemes’ investments, and our taskforce will help ensure that focus on social factors continues to grow among pension schemes and throughout the investment chain,” Opperman said.
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Reacting to the news, Maggie Rodger, co-chair of the Association of Member Nominated Trustees (AMNT), said the Association had ‘long campaigned’ for social factors to be taken into account in the investment process and therefore welcomed the establishment of the taskforce.
We “expect to input substantially into the debate”, she added. “The position of trustees must be explained and protected and we shall undoubtedly want to explore further the ways in which the wish of trustees can be better implemented by the asset management community.”
Tom Selby, head of retirement policy at AJ Bell, added: “Much of this focus so far has centred on the ‘environmental’ part of ESG investing. Social factors, by contrast, are notoriously tricky to pin down and require assessments to be made about whether a company, sector or country is acting in a way that is ‘good’ for society in the short, medium and long-term. This can feel a bit like the investing equivalent of catching smoke.
“By creating and leading a taskforce focused specifically on the ‘S’ of ‘ESG’, pensions minister Guy Opperman is hoping to provide tools schemes can use to track the social impact of investments, share best industry practice and, perhaps most importantly, drive all aspects of ESG investing up the agenda of UK pension schemes.”
