Thousands of trustees of pension funds could be caught out by rules that from tomorrow require them to consider climate change and other environmental and social factors when making investment decisions. Sir Steve Webb, the former pensions ministers, said that trustees ultimately could be opening themselves up to the risk of being fined or banned for non-compliance. They may also face legal challenges from pension fund members. New rules from the Department for Work and Pensions come into force on October 1 for all defined-contribution schemes with more than 100 members. The regime will be extended to traditional defined-benefit schemes a year later. Trustees will have to set out in writing how they are taking environmental, social and governance, or ESG, factors seriously when they invest members’ money. They also will have to explain whether they take into account other non-financial factors, such as their members’ ethical or moral views. Trustees tempted to treat the new regime as a tick-box exercise could come under the scrutiny of The Pensions Regulator, according to a joint report from Sir Steve’s employer, Royal London, and Herbert Smith Freehills, the legal firm.
Times 30th Sept 2019 read more »