Should trustees feel constrained by the existing interpretation of their fiduciary duties? The question and answer at the heart of a review by the UK Law Commission have the potential to liberate pension trustees, and assets guided by them, once and for all.

For nearly three decades, trustees in the UK have felt constrained in their activism by a ruling – Cowan v Scargill – that implied they should invest to maximise returns for beneficiaries, regardless of the long-term impact. But in its preliminary comments, the Commission has now said environmental, social and governance  concerns should be part of trustees’ everyday considerations, as should compliance with existing multinational conventions.

This could free Europe’s largest pensions market to invest more explictly along sustainability lines. However, this hinges on a statement at the end of the consultation and the potential for this freedom being enshrined in legislation.

Such a codification brings problems in itself, as laws are inflexible and must be adapted over time – one of the main arguments used by the Commission against proposing new primary legislation.

Clarity is vital, but just because a law risks being inflexible does not mean we should be complacent and accept some revisions to existing financial codes of conduct and regulation. It is not enough to free those trustees influenced heavily by outdated legal advice, and it is not in the interests of the younger generation, being auto-enrolled into pension schemes selected by their employers, to continue to invest for the best return when more pressing matters of long-term sustainability and environmental health are discarded.

Pension funds should be in the vanguard of environmental investing, with their patient capital serving as a perfect match for many of the more proven technologies to boost growth and lead economies back to health at a time when banks are constrained.

Not only is such an approach beneficial for members in stimulating the job market; an environmental focus – shying away from heavy pollutants for instance – could help ensure those beneficiaries will still be able to enjoy their retirement 50 years from now.

It is for this reason that a clear statement is required, allowing pension funds to take action where governments are sometimes blinded by short-term political constraints, providing for members’ futures while also improving it.