The Association of Member Nominated Trustees has congratulated the government on its new regulations strengthening trustees' investment duties.
The new regulations, laid by the Department for Work and Pensions (DWP) on Tuesday, will require pension trustees to publish information in their Statement of Investment Principles (SIP) report from October 2019 about how they will take account of ESG issues. They will then have to report annually on how they have acted, or will act, on member views with regard to these ESG issues.
When publishing the SIP, trustees will also have to state what their policies in are relation to the stewardship of investments, including engagement with investee firms and the exercise of the voting rights associated with the investment.
Janice Turner, founding co-chair of Association of Member Nominated Trustees (AMNT), said:
“We strongly welcome this initiative from the Government and see these new regulations as a huge step forward for the ESG agenda. In order to become more responsible investors, it’s important that pension trustees are able to take a more active asset ownership role. This is why we developed the Red Line Voting Initiative, the UK’s first freely available comprehensive voting policy on ESG issues.
“However, our work has identified a reluctance among the fund manager community to accept trustee voting policies. We believe that the new regulations make it even more clear that this issue has to be addressed, and we at the AMNT will continue our campaign to empower trustees to adopt and implement their own stewardship policies.”
Work and Pensions Secretary, Esther McVey, said:
“We welcome AMNT’s response to our new regulations. By ensuring people have access to information about the nature and sustainability of investments we can create a win-win situation for those investing their hard-earned money in a pension fund, as well as expanding the choices on offer.”
The AMNT is also pleased to announce it has received a two-year grant from the Joseph Rowntree Charitable Trust to continue with their campaign to fight for the right of asset owners to direct their own stewardship policies.
The campaign will focus on four key areas:
- Increasing trustee engagement on ESG with a particular focus on investment consultants. Over the past year, AMNT along with its partner the UK’s Sustainable Finance and Investment Association (UKSIF) secured a commitment from 16 UK investment consultants, representing roughly 85% of the market by market share, to bring the Pensions Regulator’s ESG guidance to its client base.
- Fund manager unwillingness to split voting in pooled funds, with AMNT, UKSIF and the UN-based Principles for Responsible Investment (PRI) having commissioned research to shed light on this issue.
- Transparency and accountability on fund managers’ stewardship approach and related outcomes.
- Policy engagement to help shape regulatory developments on stewardship for trustees and fund managers.
Leanne Clements, campaign manager for Red Line Voting, added:
“The timing of this campaign is crucial given regulatory developments in this area, with more pressure than ever on trustees to develop their own responsible investment approach. We will work towards dismantling the barriers to effective stewardship that exist so that trustees can adhere to TPR regulatory requirements.”
The Association of Member Nominated Trustees (AMNT) is a not-for-profit company limited by guarantee, set up by and for member-nominated trustees, member-nominated directors and employee representatives, of UK based occupational pension schemes in the private and public sector. Set up in 2010, the AMNT has included nearly 800 trustees in its membership, and together these have represented pension schemes with assets under management of around £750 billion, one third of the total UK occupational pensions sector.
The Association is dedicated to providing those Member Nominees (MNs) with support, which underpins their critical role in ensuring that their pension scheme is governed in the best interests of the scheme members in consultation with their sponsors. The AMNT will enable MNs to build their skills and knowledge, voice their opinions, share best practice, become part of a like-minded community and be better recognised for the good and important work they do.
The AMNT has introduced a new approach to responsible investing, Red Line Voting, which enables pension scheme trustees to play a proper stewardship role with regards to the companies in which they invest, including pension schemes investing via pooled funds meet their fiduciary duties in line with the recent guidance from The Pensions Regulator and the Law Commission, It does this by allowing pension schemes to set environmental, social and governance (ESG) voting policies at “best practice” level. For more details, please refer to: http://redlinevoting.org/what-is-red-line-voting/
The Joseph Rowntree Charitable Trust is an endowed Quaker trust that supports people addressing the root causes of conflict and injustice. The grant to AMNT was awarded under its Power and Accountability programme.
The Joseph Rowntree Charitable Trust (www.jrct.org.uk) is an entirely separate organisation from the Joseph Rowntree Foundation (www.jrf.org.uk) and Joseph Rowntree Reform Trust (www.jrrt.org.uk). To avoid any confusion, any references to the Trust should use the full name.
Campaign Manager for Red Line Voting, AMNT
M: 07825 278430