Requiring pension trustees to state their policy on members’ ethical concerns and stewardship may be included in upcoming recommendations to the UK government from an advisory group on social impact investment chaired by Elizabeth Corley, Vice Chair and formerly CEO and managing director of Allianz Global Investors.
The UK Treasury created the advisory group to look at how to create a culture of social impact investment and savings across the UK. The group includes a long list of mainstream investors and specialized social investors including Social Finance, Big Issue Invest, Blackrock, the Investment Association and the National Employment Savings Trust (NEST).
This week, Corley sent a letter to Stephen Barclay, the Economic Secretary to the Treasury, outlining the group’s approach.
The group will structure its recommendations on developing the social impact investment chain around seven themes: investable assets, scale, advice, pension funds, engaging retail investors, reporting on social impact and industry education and standards.On pension funds, it will consider if trustees should be required to state their policies in relation to members’ ethical concerns and stewardship This was recommended by the UK Law Commission earlier this year in a report on social pensions.
The group will also consider the issue of liquidity requirements for pension funds and who could provide guidance, and the current analysis around social impact asset risk return profiles, and how this can be built upon further.
On impact reporting, the group will consider recommendations around developing standards. The group will also consider strengthening the understanding of social impact investment for regular end-consumers.
The final findings and recommendations are set to be published this autumn. Corley says it will incorporate an action plan with immediate, practical steps, as well as outlining action needed for both the industry and government in the medium and long-term to embed a more systemic change in the financial services industry.