A new industry body has been launched to give trustees a greater voice in the debate concerning sustainable investment and to help regulators build better, more meaningful regulations.
The Trustee Sustainability Working Group, which initially consists of 11 members, acknowledged in a launch statement that regulation has raised awareness of sustainability and on climate change in particular.
However, the group said too much emphasis on low-level reporting wastes time and resources on box-ticking exercises that would be better spent furthering the transition towards a low carbon economy.
Bobby Riddaway, managing director of HS Trustees and the group’s chair, has championed the idea of transition plans for large schemes and implementation statements for smaller pension schemes.
Pension funds have only been given the obligation of such detailed climate modelling in order to identify risk, but it the group argued it was unreasonable for them to do so much heavy lifting when the problem of climate change was a problem for all of society.
“The big risks of climate change are societal risks,” said Riddaway in a video interview. “Society will be doing the modelling as to why it’s a big problem. Pension schemes should get the message that climate risk is a problem, and that where they then put their money, their effort, can help solve [it].”
He added: “We need all pension trustees to understand that climate risk is a problem that we can have a say in… by using our stewardship to push companies and by investing assets to support the growth of solutions that support the transition.”
The group has stated its ambition is to be action-orientated, not just by responding to consultations, said Riddaway, but by “getting ahead of the regulation” and helping to influence the regulators to making effective changes.
“I’ve spoken already to the Department for Work and Pensions and the Pensions Regulator to let them know of our group,” said Riddaway. “They are delighted that we’re seeking to help form consultations and to get the right minds into the pre-consultation stage.
“That way, regulators and the government won’t have to change their mind on a big initiative they’re driving forward.”
The group is currently comprised of 11 experienced industry professionals and scheme trustees, including Caroline Allensby-Green of Dalriada, Natalie Winterfrost of Law Debenture, Tegs Harding of Independent Governance Group, and Maggie Rodger and John Flynn of the Association of Member-Nominated Trustees.
It also includes representatives from Zedra, PI Trustees and Bestrustees, as well as Mike Clark, founder of responsible investment advisory firm Ario Advisory.
A launch video explaining the group’s aims is available here.
