She said: “The action that DWP has decided to take – setting up a Taskforce on Social Factors to improve the data available to trustees and monitoring international reporting developments – seeks to address one of the main barriers trustees face to more effective consideration of social factors.
"We support DWP’s focus on active ownership and its encouragement for trustees to recognise the linkages between different ESG factors,” she said.
AJ Bell’s head of retirement policy, Tom Selby, noted that much of the focus of ESG has been on environmental concerns, in part because they are “easier to measure”.
Meanwhile, social factors “are notoriously tricky to pin down and require assessments to be made about whether a company, sector or country is acting in a way that is ‘good’ for society in the short, medium and long-term.
“This can feel a bit like the investing equivalent of catching smoke,” he said.
Selby added: “By creating and leading a taskforce focused specifically on the ‘S’ of ESG, pensions minister Guy Opperman is hoping to provide tools schemes can use to track the social impact of investments, share best industry practice and, perhaps most importantly, drive all aspects of ESG investing up the agenda of UK pension schemes.”
Benjamin Mercer, senior reporter, Pensions Expert
