The government is launching a taskforce to help pension schemes include social factors in their investments.
The factors, which are a key part of environmental, social and governance investing, range from workforce conditions and supply chains to community engagement, consumer protection and modern slavery. The taskforce will be led by pensions minister Guy Opperman and aims to support pension scheme trustees and the wider pensions industry with key challenges around managing social factors, including identifying reliable data and metrics.
By October, 80% of UK pension scheme members will be in those that measure and publish how their investments support the Paris Agreement. However, Opperman said climate change should not be trustees’ sole consideration: “Financially material social factors also pose risks and provide opportunities to schemes’ investments, and our taskforce will help ensure that focus on social factors continues to grow among pension schemes and throughout the investment chain.”
The move follows responses to a government consultation, Consideration of social risks and opportunities by occupational pension schemes, which highlighted the need for a proactive approach to embedding social factors within pension schemes’ investment decisions and stewardship policies.
• Most Local Government Pension Scheme funds are keen to increase their investments in social infrastructure. A poll by Alpha Real Capital found that 94% would like to invest more in health, with 89% aware they would be supporting vital services on which their members and wider communities rely.