Occupational Pensions Stewardship Council aims to empower asset owners
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Numerous large pension schemes took part in the inaugural meeting of the new Occupational Pensions Stewardship Council on Thursday. The group is part of the Department for Work and Pensions’ efforts to strengthen the investment demand side and thus support the move to net zero.
Creating a stewardship council of pension schemes was one of the recommendations made in the 2020 report Investing with Purpose by the Asset Management Taskforce, consisting of government, senior representatives from asset management, regulators and key stakeholders.
Stewardship is seen as an important tool to support the government’s aim of transitioning the UK to net zero by 2050 and ensure social and good governance factors are taken seriously, giving asset owners more power to demand sustainable investments from asset managers.
The council aims to provide a platform for sharing best practice and research, giving support to pension schemes wanting to take part in "more thoughtful investment", covering areas like shareholder resolutions, climate change and corporate governance, according to the DWP.
Pensions minister Guy Opperman said the Council will help companies ensure they are fit for purpose in the 21st Century.
“It seems to me that the role of pension schemes, trustees and asset managers over the next five to 10 years will be utterly vital in the passage of this country, and the entire world, to net zero,” he said.
The DWP has said previously that the council will give a stronger overall voice to trustees within the market, especially in relation to service providers.
So far, 28 schemes with more than £550bn of assets under management have signed up, including local government asset pools, DC master trusts and universities schemes, as well as the corporate pension schemes of BAE Systems, BT, HSBC, Nationwide, NatWest, Reed Elsevier, Shell and Tesco.
The Council is open to all UK occupational pension schemes, except for those that cater for multiple unconnected employers and are sponsored by firms that sell investment management services to other schemes.
The DWP has also set up a Taskforce on Pension Scheme Voting Implementation, which is looking at barriers to pension scheme voting, such as the proliferation of pooled fund investing, and considering the case for reform of the UK’s shareholder voting system.