Stuart O’Brien, Partner at Sackers, said: “Trustees are under pressure to achieve and demonstrate compliance with a growing list of requirements to increasingly tight timeframes. Despite these broader concerns, there was a clear recognition of the importance of ESG and climate issues to pension scheme investments from respondents, whose trustee boards are working hard to comply with their fiduciary duties and achieve the best outcomes for their members. Advisers have a significant and ongoing role in supporting trustees through these successive changes to regulation, particularly as changes in a scheme’s investment strategy, and subsequent material changes to its investments, will take time to achieve.”
Key takeaways from the survey:
• Clear, jargon-free advice and guidance on ESG products and services needs to be more accessible for trustees
• Integration of ESG into DC default funds was considered lagging among respondents. The development of a greater number of funds with demonstrable ESG integration is needed to combat this
• Lack of products was also identified as a barrier when implementing ESG policies, with 28% of respondents citing this issue and concerns around ‘greenwashing’ raised
• Trustees’ primary focus is a financial one, while confusion around the extent to which member views should be taken into account persists. Ethical preferences which are non-financial in nature should be regarded as a secondary consideration and can only legally be taken into account in strictly limited circumstances.
The full report can be found here.
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