How can pension plans and financial managers boost sustainable investing? By forming a group to do so.
British asset owners and managers are forging an alliance with that in mind. It’s in response to greater calls from regulators in the country to further the fight against climate change and promote other societal goals.
The steering group that convened this week is led by the Pensions and Lifetime Savings Association (PLSA) and the UK Investment Association (IA), and will be co-chaired by PLSA Chair Richard Butcher and Archie Struthers, the global head of investment governance and oversight at Standard Life Aberdeen, the group said Wednesday.
“The relationship between asset managers and asset owners is vital if we are to achieve the objective of investing for good,” Butcher said in a statement.
The formation of the group follows a push from the country’s financial regulatory body, the Financial Conduct Authority (FCA), to build a regulatory framework for sustainability, such as for climate change or workforce pay.
Part of the discussion in the working group will address ongoing criticism of sustainable investments, including the lack of a cohesive set of definitions, as well as data that is often considered inconsistent.
Members of the group will discuss how manager disclosures can align with sustainability goals for clients; how asset owners can ensure stewardship remains central to manager selection and performance assessment; and how both contractual and non-contractual arrangements can reflect stewardship expectations going forward.
“If pension schemes are to deliver on an intention to invest in a climate-aware fashion, they need to articulate that intention clearly enough that it will be delivered by their agents,” Butcher continued.
Other members of the UK stewardship group include Helen Dean, chief executive at Nest; Rachel Elwell, chief executive at Border to Coast Pension Partnership; Luba Nikulina, managing director and global head of research at Willis Towers Watson; Stuart O’Brien, partner at Sackers; Jennifer Ryan, head of UK institutional client business from BlackRock; and Robert Walker, global co-head of asset stewardship at State Street Global Advisers.
“I’m delighted to be part of this steering group,” Nest’s Dean said in a statement. “Investors like pension schemes should be active stewards. We have a responsibility to help our members achieve the best long-term returns—investing without engaging is handing over the power of our members’ voices to others.”
“By working together with pension schemes, we can further embed stewardship within the investment process to ensure our members are delivering long-term sustainable value, that not only meets schemes’ financial objectives, but will also deliver on their environmental, social, and governance [ESG] aims,” IA Stewardship Manager Sarah Woodfield said in a statement.