Several UK pension trustees have come together to form a working group aiming to provide a strong trustee perspective on sustainability investment practice and regulation.
Dubbed the Trustee Sustainability Working Group, it was instigated by Bobby Riddaway, a former investment consultant who moved into full-time trustee roles at the start of 2023 and is now managing director of HS Trustees, a professional corporate sole trustee.
In a launch announcement, the group said the initial focus would be on climate change, and that it wanted to work with regulators and “be a strong voice for the pensions sector”.
“We believe that pension regulation has helped drive the awareness of sustainability and, in particular, the issue of climate change but now has an over-emphasis on low-level reporting,” the statement read.
“This has direct implications for the use of our limited resources, especially for small and mid-size schemes.”
‘Action-oriented’
The new trustee group appears to have some overlap with a workstream set up earlier by the Investment Consultants Sustainability Working Group (ICSWG), but Riddaway said “a new loud trustee voice on sustainability” was needed.
The trustee sustainability group aims to be “action-oriented”, according to its launch announcement, and will work with pension schemes, consultants and asset managers, in addition to regulators.
It said that defining success for the group was not easy, “but if we can look back in a couple of years and see transition plans developing across the pensions sector, practical solutions for small schemes and richer conversations about risk, then we will know with confidence that our efforts have contributed to that progress”.
Riddaway has previously argued that transition plans would be more valuable than the climate disclosures that many UK pension schemes currently produce, to a large degree to respond to regulatory requirements.
The Pensions Regulator has said that many pension schemes only achieved minimum compliance with ESG aspects of statements of investment principles and implementation statements.
The newly formed Trustee Sustainability Working Group also said it sided with the view that much of the climate scenario modelling across the industry was not decision-useful, and that it wanted to support work to explore why such modelling “often seems to be at variance with science”.
In addition to Riddaway, the trustees in the group are: Caroline Allensby-Green (Dalriada); Peter Cameron Brown, Sarah Marshall (PI Trustees); Natalie Winterfrost (Lawdeb); Tegs Harding (IGG); Natalie Waller, Maggie Rodger (with John Flynn as alternate representative of the Association of Member-Nominated Trustees); Anne Sander (Zedra); Roger Breeden (Bestrustees); and Richard Giles.
Mike Clark, a critic of climate scenario models used in the pensions industry, is also involved in the group as a guest climate expert.
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