PLSA – Industry view


Caroline Escott is senior policy lead of invest- ment and stewardship at the PLSA


LESSONS FROM COVID TO TACKLE CLIMATE CHANGE


Covid-19 has demonstrated the level of work and co-ordinated activity required to tackle big, compound risks, as well as the interrelation between the environment and our economy.


It is a lesson the investment industry should learn, to better tackle another issue which poses a systemic risk to nearly every business in every sector: cli- mate change.


Although UK pension schemes have often led the way on responsible invest- ment, new disclosure duties for UK pen- sion schemes have contributed to a step- change in scheme investors’ appetite and consequently to a proliferation of ‘ESG’ products and services further down the investment chain.


Climate change is a complicated issue, which requires a multi-faceted response. Where asset managers, investment con- sultants, legal advisers and companies work in alignment across the value chain to give pension schemes the high-quality and relevant information and support they need to effectively consider climate in their investment decisions.


The PLSA plays a unique role in bringing these factors together and, given the pressing nature of the climate emergency, we continue to progress our Investing for Good programme to tackle climate change in 2020 and beyond. To further explore the barriers and ensure we respond with tailored solutions, the PLSA has been hosting a series of virtual roundtable discussions with our mem- bers, hosted by PLSA chair Richard Butcher. We’ve been delighted with the response and the quality of the feedback, which will help shape our policy propos- als to encourage effective climate invest- ment across the investment chain, and in savers’ best interests. We also recognise the need to help guide our members through the maze of recent (and forthcoming) regulatory changes. This year we’ve published our 2020 Stew- ardship Guidance and Voting Guidelines – the most downloaded PLSA report of the year so far – where we offer practical guidance to scheme investors on how to assess (and support) shareholder resolu- tions on climate, as well as how to hold company directors individually accounta- ble on their management of climate risks. And with savers at one end of the chain showing a growing interest in where their money is invested at the other end, we are about to publish practical guidance for schemes to help them produce clear, meaningful disclosures on (responsible) investment which are compliant and rele- vant to beneficiaries. This is not to downplay the significant amount of excellent work schemes are already undertaking in this space. In fact, the PLSA is also pulling together case


studies from our pension scheme mem- bers which showcase best practice in the pensions and investment industry, to sup- port others in their learning and to help influence the public debate. Pension schemes can wield significant influence, drawing good practice up through the investment chain. Recent months have seen pension schemes work effectively and efficiently with their advis- ers and managers on the serious chal- lenges arising from Covid-19, while clearly communicating simple, effective messages to savers. The PLSA aims to bring investors together in a similarly col- laboratively way in our work on climate investment, to ensure that together we can better protect and enhance the value of individuals’ savings in the face of the looming climate emergency.


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ISSN: 2045-3833 Issue 95 | August 2020 | portfolio institutional | 15


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