A workstream of the Investment Consultants Sustainability Working Group (ICSWG) has published its first paper to help UK pension scheme trustees focus on more impactful investment decisions. The core objective of the workstream, which was set up in early 2024, is “to help and enable pension scheme trustees to focus more on impactful investment decisions and less on reporting and regulatory compliance,” according to the ICSWG. In its position paper, the workstream proposes a unified sustainability reporting framework for pension schemes to replace the current patchwork of reporting standards, shifting the focus of pension fund regulation from single materiality to double materiality, and dismantling barriers to greater investment in illiquid for pension schemes. A key part of this last recommendation would be to incentivise insurance companies to accept more illiquid assets as collateral, meaning that pension funds would not be so reluctant to hold them. The ICSWG was set up in 2020 and is a collaboration between 19 UK investment consultancy firms. “It’s clear that participants in the investment chain should play a fuller role in policy and regulation, as these frame the well-functioning capital markets on which our clients’ financial well-being depends,” said Paul Lee, Head of Stewardship and Sustainable Investment Strategy at Redington.
