On the go: The government is preparing to regulate in order to achieve consistency on environmental, social and governance standards across the private sector, ministers have told the chair of the All-Party Parliamentary Group for ESG.
Speaking on the morning of the Pensions and Lifetime Savings Association’s two-day ESG conference, Conservative MP Alexander Stafford also said that the Department for Work and Pensions, the Treasury and the Department for Business, Energy and Industrial Strategy are working to harmonise common reporting standards, adding that his APPG will feed into the process.
“From pension funds, I call for greater, meaningful engagement with ESG investing and ESG projects,” he said, pressing for regular reporting from schemes.
“From the government, I would consider the introduction of mandatory reporting standards for pension funds and companies of all sizes,” he added.
Stafford called for the codification of ESG performance-reporting metrics and government investment in ESG projects.
The DWP’s Task Force on Climate-related Financial Disclosures consultation closed in January.
It suggested that trustees be required to report on a new “portfolio alignment” metric, designed to inform scheme members of the extent to which their portfolios are aligned with Paris Agreement targets.
Speaking at a separate PLSA session, Adam Matthews, chief responsible investment officer for the Church of England Pensions Board, pushed for schemes to collaborate on standards.
The board uses the Institutional Investors Group on Climate Change’s Net Zero Investment Framework, which Matthews credited with helping trustees with target-setting and reporting to members. He nevertheless called for schemes to work together.
“Setting your own targets, having your own framework without actually any comparability or standardisation across the industry won’t work, and won’t add up on what needs to happen,” he said.
Richard Butcher, managing director at PTL, told Pensions Expert that at present, trustees face numerous reports using different data points and metrics.
“This makes it really difficult for us to process and comply, but also the output largely useless when [it] comes to comparison,” he said.
