The United Kingdom Pensions & Lifetime Savings Association (PLSA) have directed that the trustees of UK Pension Schemes are required to complete an ESG Template. First order of business on the template?…..
What is your LEI?
Environmental, Social and Governance (ESG) has become more prominent in recent times with regards to financial services, pension schemes and investments.
ESG policies are concerned with environmental, social and governance factors that may affect the performance of a company or asset.
The PLSA are encouraging responsible investment and market participation by way of ESG reporting duties. This will force pension schemes to at least consider how they factor in the importance of ESG risks in their business decision making policies.
To date, the key focus for trustees of UK Pension Schemes has been to maximise returns. However, recent rules drafted by the Department for Work and Pensions (DWP) require UK pension schemes to clarify and explain their policies surrounding ESG (including climate change) factors.
The PLSA have now issued a template to UK pension scheme trustees which must be completed and filled. One of the requirements is “What is your Legal Entity Identifier?”
If you are a trustee of a UK pension scheme you can find this template below.
UK Pension Schemes also require an LEI for a number of other reporting regulations such as Mifid 2. Click here to find out more about LEIs for pensions schemes. Trustees should also consider the implications of the 2019 changes to the Investment Regulations, which implement the EU’s second Shareholder Rights Directive (SRD II). The second phase of SRD 2 was due in September 2020. SRD is one of many European regulations introduced after the last global recession revealed many weaknesses in the global financial system such as excessive risk taking, lack of transparency with regards to risk analysis, identification of shareholders and complex chains of intermediaries.
These mounting regulatory requirements mean it is becoming increasingly important for firms to have a clear policy around ESG going forward.
Click here to read the PLSA guide on ESG for pension schemes and investment firms.
