Category: DB + DC

Material change: a five-step ESG checklist for trustees

How can pension trustees prepare for new requirements on the financial materiality of environmental, social and governance (ESG) factors?

This guide shows how embracing the spirit of the regulation can have a positive impact on investment portfolios.

‘ESG considerations’ mean many things to many people – not least regulators, who are now viewing them as core to the duty of pension scheme trustees. New guidelines from the Department of Work and Pensions (DWP) make it clear that it is not sufficient to focus on a narrow definition of the bottom line in order to meet schemes’ core objective: providing retirement benefits for members. Instead, trustees must also consider the financial materiality of ESG considerations. But what does this mean in practice?

This guide will help cover the key areas, in order to enable trustees to be fully prepared, touching on:

  • What has changed
  • An introduction to ESG integration
  • The Statement of Investment Principles (SIP)
  • Investment strategy and asset allocation
  • ESG integration in asset manager selection
  • Reporting requirements

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