The English Law Commission has released a report on Fiduciary Duties of Investment Intermediaries
"In this report we have considered the question of long-term investment
with particular reference to pensions, where liabilities will typically
be incurred over a long period (...)"
"We conclude that trustees should take into account factors which are
financially material to the performance of an investment. Where trustees
think ethical or environmental, social or governance (ESG) issues are
financially material they should take them into account."
"We also conclude that, whilst the pursuit of a financial
return should be the predominant concern of pension trustees, the law is
sufficiently flexible to allow other, subordinate, concerns to be taken
into account. The law permits trustees to make investment decisions
that are based on non-financial factors, provided that:
- they have good reason to think that scheme members share the concern, and
- there is no risk of significant financial detriment to the fund."
Labels: law commissions, pension law, UK