Investment perspectives - autumn 2019
Responsible Investment: Moving beyond core
27 Nov 2019
For UK pension schemes, 1 October 2019 was a milestone date for pension regulation. You will be aware that the trustees of both defined benefit and defined contribution schemes are now required to produce a Statement of Investment Principles which sets out both how they take account of financially material considerations and their policies in relation to the stewardship of investments, including specific reference to climate risk.
For many the looming deadline may have meant treating the change as a tick box exercise, doing what was necessary to meet regulatory requirements. Some may be happy with meeting the initial hurdle, but for many this will be seen as a starting point for reconsidering their behaviours with regard to responsible investment (‘RI’) practices. The challenge is how best to move forward from here.
Our starting point when talking to clients is to ask the question: “what sort of responsible investor and how active a responsible investor do you want to be?”.
On the spectrum of different behaviours, those who wish to treat the changes as a compliance activity sit firmly in the bottom-left of what we refer to as our core-active-leader framework, while others wish to be more active or even industry leaders.
Click here to read the full article, including our core-active-leader framework and case studies.
This article is from our autumn issue of Investment Perspectives.