The UK government has announced the details of a new expert group that will support it in developing statutory guidance aimed at providing clearer direction to trustees on how their fiduciary duty relates to long-term and systemic matters such as climate change.
The plan to develop such guidance was announced last year by pensions minister Torsten Bell.
This was after a fellow member of parliament (MP) had tabled a proposal to amend the Pension Schemes Bill, the wide-ranging reform legislation currently going through parliament, to make “system-level considerations” part of pension funds’ investment duties.
The 13-strong technical working group on fiduciary duty met for the first time earlier this month. It includes representatives from NEST, the UK defined contribution scheme with the most members, Universities Superannuation Scheme, one of the largest private pension schemes in the UK, LGPS Central, a growing local government pension scheme pool, and Independent Governance Group, a professional trustee firm.
Pension lawyers and industry groups are also on board the technical working group. Some of its members, including chair Robin Knowles, were part of a Financial Markets Law Committee (FMLC) working group that, in 2024, produced guidance for pension trustees on fiduciary duty and climate change; Knowles, a high court judge, led that FMLC working group.
In a statement, the Department for Work and Pensions (DWP) said the technical working group’s objective was “to support government with guidance that is principles-based and grounded in practical real-world examples of long-term financial risks such as climate-related and social factors, something trustees and advisers have repeatedly said would be of real value”.
Knowles said: “Where investment is concerned, these are complex times. Trustees, with those who assist and advise them, are entitled to clarity and confidence as they do their crucial work.
“To those ends, bringing together experience and expertise from across the sector, we will endeavour to support trustees with practical and realistic guidance on their duties.”
The full expert group membership is:
- Simon Daniel – Eversheds Sutherland
- Matthew Swynnerton – Association of Pensions Lawyers
- Andy Lewis/Stuart O’Brien – Sackers
- Richard Giles – The Institute and Faculty of Actuaries
- Claire Brinn – ShareAction
- Patrick O’Hara – LGPS Central
- Maria Espandinha – Pensions UK
- Oscar Warwick Thompson – UKSIF
- Jo Myerson – Independent Governance Group
- Emma Jones – USS
- Claire Jones – The Investment Consultants Sustainability Working Group
- Diandra Soobiah – NEST
DWP said that as the work progresses, a wider advisory group will be engaged through a series of roundtables.
The guidance will ultimately also be put out for consultation.
