Don’t let the increased requirements take you away from working towards a climate-friendly asset strategy

[caption id="attachment_14059" align="alignright" width="300"] Photo: Private[/caption] You have been shortlisted multiple times for Pensions Personality of the Year at the UK Pensions Awards. What, in your view, is crucial for trustees' and pension schemes' success in fulfilling their fiduciary duty while making effective strides in ESG efforts?I think that it is crucial for the pension scheme industry to ensure that pension schemes of all sizes can make strides in ESG. The first main introduction for pension schemes was TCFD regulations for the largest schemes. This work cannot be tripled with reporting on Biodiversity and Social Factors, so an overhaul is needed to ensure that:

• Schemes can take account of all factors, not just climate change.
• Small schemes can put their weight behind solving climate change.
• Reporting does not take up the majority of the time set aside for ESG.

This is especially important as the new General Code has just been published along with the new Funding Code, and Pensions Dashboard compliance is on the short horizon. In his latest book, Will Martindale posits that stewardship, employed as a responsible investment tool, frequently falls below its potential real-world impact and lacks the ability to instigate significant change. What factors do you deem crucial in ensuring the effectiveness of stewardship when working with investment managers?Stewardship needs to be targeted, with clear aims and demonstrable outcomes. We also need to make use of collaboration, where possible, as increasingly it is the weight of investors that makes the difference, especially as there is now increasing pushback from the US. I have been involved recently in a new initiative with ShareAction that has enabled small schemes to play a big part in a recent resolution at a large European company. I am working hard with ShareAction and consultants to see if we can roll this out across all small schemes. How does Diversity, Equity, and Inclusion (DEI) factor into your work?We need to ensure that each of our clients has a DEI policy which is understood and implemented. This is now also explicitly measured by the new Own Risk Assessments that have been introduced by the new General Code.

It is crucial for the pension scheme industry to ensure that pension schemes of all sizes can make strides in ESG.

What are the primary challenges your clients encounter, and how do you provide support in addressing them?As professional trustees, we bring added professionalism to pension schemes either as a co-trustee, chair of trustees, or sole trustee. We are increasingly seeing companies struggle to appoint trustees or to keep up with the increased regulation and skillset required. This is resulting in more schemes appointing new professional trustees and more trustee boards moving to sole trustee.

Climate change is a real and present danger that the assets in pension schemes should be working together to mitigate. Don’t let the increased governance requirements that could dominate trustee boards in 2024 take you away from working towards making your asset strategy climate friendly.

If you could convey a message to all the pension schemes in the UK, what would that be?Climate change is a real and present danger that the assets in pension schemes should be working together to mitigate. Don’t let the increased governance requirements that could dominate trustee boards in 2024 take you away from working towards making your asset strategy climate friendly. brief bioBobby is a Professional Trustee and Non-executive Director with over 30 years’ experience in pensions and investments. He is currently Chair of Trustees on the DB Scheme of a London based firm of Lawyers. He is a regular speaker on DB, DC and ESG/ Stewardship issues and is looking to assist both the industry and his Pension Schemes in these areas over 2024. He is also currently an asset owner member of the AIMSE Europe council and past Chair of the ACA Investment Committee.