The final word
I think it’s very clear that the EU’s Sustainable Finance Action Plan is a very ambitious project that is undoubtedly going to propel sustainability considerations towards the forefront of advice processes.
At a UK level, we have seen many developments over the last 12 months. The DWP introduced new rules in October 2019 aimed at trustees of occupational pension schemes largely in relation to updating Statements of Principles (SIP) to disclose how ESG is taken into account within the investment decision making process. There are further rules from the DWP coming into effect in October this year to include an implementation statement in the SIP.
In addition, there’s a proposed amendment to the Pension Schemes Bill which will make the UK the first country to align the actions of pension schemes with the Paris Agreement and there is also an FCA requirement for Independent Governance Committees to report on their firms’ ESG policies. Collectively, all of this is a very clear signal of intention from policymakers and regulators about the direction of challenge in this area.
Developments in this area have moved at quite some pace and will continue to do so in the months and years ahead. Advisers should consider the many different implications of these legislative proposals and give consideration to how all of this can be integrated into their firm and advice processes.
