Fiduciary duty – Feature


ing the charge on responsible investment and already commit- ted to net-zero strategies, these blanket proposals are unneces- sary,” a statement from the association said at the time. “More importantly, [the proposals] break the principle that trustees should apply their fiduciary duties, and their responsibility to invest in their members’ best interests.”


It is on this last point that the nub of the matter rests. Is push- ing for ESG investments part of the fiduciary duty of trustees or a breaking of it? The Labour Party had joined a debate that had been simmering for a while. It centres around ESG com- mitments, particularly climate change, and where they sit with fiduciary duty. Should the focus be on getting the best returns for asset owners and members, as the original precept for fidu- ciary duty declared, or fulfilling wider objectives on ESG? Fiduciary managers have enjoyed a certain amount of wriggle


room in their discretion as to how they invest, and this can be pretty wide with many occupational pension funds, but the central principle was always getting the best returns for members.


Fiduciary evolution Following the ruckus caused by Labour, it was inevitable that the issue would rear its head at the PLSA’s Annual Conference in October. Here ShareAction chief executive Catherine How- arth asserted her view that there needs to be something of an “evolution” of fiduciary duty to enable a wider and braver investment mindset from trustees which takes into account many aspects of ESG. “Pensions certainly want to get a good return on investment, but if the investments made over the lifetime of a pension fund


Issue 109 | December-January 2022 | portfolio institutional | 47


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52