(CB):...I turn to my
Amendments 201 and 237, which relate to fiduciary duties and
would require the Secretary of State for Work and Pensions and
the FCA to publish guidance—to which occupational pension schemes
and FCA-regulated firms must have regard—considering the
long-term consequences of decisions and the impacts of their
investments on society, climate and nature. This reflects duties
applicable to companies under the Companies Act, but those
provisions apply to financial services companies only in relation
to their shareholders, not their clients, and they do not apply
to pension funds at all. I very much welcome the work to date of
the DWP and FCA on fiduciary duty. However, research by
the Principles for
Responsible Investment a UN-founded body with
3,000 signatories and $100 trillion in assets, found that
investor understanding of their duties was discouraging them from
pursuing—or even considering—positive sustainability impacts, and
recommended further guidance from the UK Government and
regulators. Similarly, a study by the UK Sustainable Investment
and Finance Association reported that
“We continue to see a common lack of understanding within
financial services on the extent to which ESG”—
Environmental Social and Governance—
“factors form part of investors’ fiduciary duties. This area
needs urgent clarification for finance to reach net-zero.”
UKSIF also recommended that guidance that both risks and impacts
should be considered a core component of fiduciary duties...
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