On the go: A majority of leading pension figures believes that effective stewardship is more influential in tackling environmental, social and governance issues than in what is being invested, according to participants at a Law Debenture event.
More than 330 pension professionals and trustees gathered at the 15th annual Law Debenture debate held virtually on Monday. The theme – ‘This house believes that effective stewardship is more influential in tackling ESG issues than what you invest in’ — was particularly relevant to the pensions industry figures, to whom, as long-term investors, sustainability is crucial.
The industry is also facing mounting pressure from regulators to incorporate ESG considerations into all aspects of pension scheme management.
Arguing for the motion at the debate were Jeannette Andrews, corporate governance manager at Legal & General Investment Management, and Dawn Turner, independent adviser and non-executive with expertise in responsible investment, sustainable finance and ESG risks.
Vicki Bakhshi, director in the responsible investment team at BMO Global Asset Management, and Colin Melvin, founder and managing director of Arkadiko Partners, argued against the motion.
An indicative vote was taken ahead of the debate to test the audience’s initial views, which found 66 per cent believing effective stewardship is more important than in what is being invested. When the final vote came in, however, the number had dropped to 60 per cent agreeing with the motion.
Therefore, overall there is a strong feeling that positive change for good can be better effected by engaging with the companies held within a pension portfolio than choosing to sell companies with weak ESG credentials to allocate capital to ‘good’ companies.
Asreported by Pensions Expert in May, the Work and Pensions Committee launched an inquiry into the government’s approach to ensuring pension schemes considered the risks to funds posed by climate change and the role they can play in meeting emission-reduction targets.
Ahead of the COP26, which will take place in November, the committee is seeking views on how the government’s approach to pension stewardship can inform and should be informed by approaches taken intentionally, and how schemes can be supported to make climate-conscious investment decisions.
Venetia Trayhurn, trustee director and LawDeb host for the event, said: “The result, while not departing from the majority view, certainly showed a swing towards the opposition, and reflected just how complex ESG questions are for the UK pensions industry.
“We are all at different stages of implementing ESG considerations across schemes, and hearing our panel of industry experts explain what they are seeing in the market was hugely valuable.”
