UK – The UK government is considering putting long-term socially responsible investing (SRI) at the heart of the proposed National Pensions Savings Scheme, an official has said.
Asked about the role of SRI in the NPSS, Peter Askins, head of policy on pension fund trustees and scheme administration at the Department for Work and Pensions, said: “We hear what you say, watch this space.”
“Obviously we are looking at all design options.”
And he praised the SRI credentials of his boss, pensions reform minister Stephen Timms, saying he has an “understanding of the issues in play”.
Timms said there was a change in the public mood about SRI, saying it was “not only about doing good but about doing well”.
But he noted resistance to SRI among pension fund advisors, although certain public funds, such as the Universities’ Superannuation Scheme were “pioneering a trail others will want to follow”.
And he said a recent report by law firm Freshfields would help to clarify ideas about fiduciary responsibility and ethical investing.
They were speaking at a presentation organised by Insight Investments’ to mark the publication of a book called ‘Responsible Investment’ - edited by Insight’s Rory Sullivan and Craig Mackenzie.
Askins told the meeting that despite all the progress on SRI, the intellectual argument had not yet been won.
“They have yet to be convinced intellectually that it is worthwhile,” Askins said of some in the investment community.
Elsewhere, the National Association of Pension Funds has welcomed indications that the government is considering increased gilts issuance.
It said: "The NAPF welcomes Gordon Brown's indication that the Treasury is considering a positive response to pension funds' calls for increased gilt issuance as the long end of the market. Demand for long-dated gilts from institutional investors is significantly greater than current supply and additional issuance would be welcome given the very low yields currently being experienced.
"We recognise, however, that one year's increased issuance will not completely solve the problem given the scale of investor demand that has been triggered by changes to accounting standards and the pensions regulatory environment."