Question to the Department for Work and Pensions:

To ask Her Majesty's Government whether they intend to issue any guidance to pension fund trustees to encourage them to invest in green assets without breaching their fiduciary duty; and if so, when.

The Government does not seek to encourage or direct pension schemes to invest in any particular class of assets. However, it does want to support pension fund trustees to be clear about their responsibilities when making investment decisions and to remove any uncertainty caused by the current regulations.

The 2017 Law Commission report ‘Pension funds and social investment’ found that some trustees are confused about their fiduciary duty to consider the long-term sustainability of investments. The Government agrees it should clarify that trustees have a duty to consider risk and opportunities in the long-term, including those arising from environmental, social, governance and climate change considerations. We have consulted on regulatory changes which, subject to the outcome of the consultation and Parliamentary approval, will make this clarification with effect from 1 October 2019.

Following the changes we anticipate that The Pensions Regulator will update existing Codes and guidance for trustees.