The results announced on July 15 do not include any policy changes and the DWP will leave it up to fiduciaries to decide how to consider financially material social risks and opportunities. It is said that
Some pension funds and service providers report managing social factors through engagement with companies and other investment chains, but “clearly there is more to be done,” Opper said. Mr Mann said.
One of the issues raised by the Trustees is modern slavery within the supply chain, which could be exacerbated by global events like the war in Ukraine. The war also changed the debate about investing in the defense and nuclear industries, he said.
“This time last year, industries such as defense and nuclear power (both civil and defense) were considered off-limits areas for ESG funds, but things are changing and ESG investing is moving along with it. It should change,” he said. “Recent events are a reminder of how important these sectors are to the safety and security of our society,” Opperman said. He said we need to join the Council to work together on collective engagement and best practices.
The Pensions Minister has set up a task force to identify reliable data and indicators, pledging to “ensure that social factors continue to receive increasing attention across the investment chain”. We help fiduciaries understand investment risks from social factors, how to monitor them, and how to report in line with international standards.
When the Ministry of Labor and Pensions consulted the Investment Principle Statements of 25 large defined benefit funds and 15 large defined contribution master trusts, a review did not distinguish between ESG factors or specifically social factors. We found that very few were addressed and instead often delegated to asset managers. Among the few statements that expanded on social factors, common themes were gender diversity, labor standards, and controversial weapons.
