The Pensions Regulator has introduced a new code of practice and ‘how to’ guides for trustees of defined-contribution schemes.
Significant progress has been made in boosting responsible investment in the UK with the publication of a new code of practice for trust-based defined-contribution (DC) pension schemes and six ‘how to’ guides to give comprehensive guidance to trustees. The investment governance guide is clear that the schemes’ investment governance arrangements need to be consistent with its legal powers and responsibilities as outlined by the Law Commission’s 2014 report into fiduciary duties. This comes after the Government rejectedchanging the regulations as was recommended by the Law Commission despite overwhelming industry support.
UKSIF was influential in promoting responsible investment to the Law Commission and has worked with The Pensions Regulator on this project over the past year- with many of our suggestions appearing in the ‘how to guide’ for investment governance. This is a huge boost for responsible investment in the UK and represents the first time the Law Commission’s review has been reflected in regulation or legislation since it was published in 2014.
Specifically, the ‘how to’ guide states that:
· Trustees should take into account factors which are financially material to the performance of an investment.
· Where trustees think environmental, social and governance (ESG) factors are financially significant, you should take these into account. Likewise if trustees think certain ethical issues are financially significant.
· While the pursuit of a financial return should be your main concern, the law is sufficiently flexible to allow trustees to take other, non-financial factors into account if they have good reason to think that scheme members share the view and there is no risk of significant financial detriment to the fund.
On sustainability TPR is clear that since most DC schemes investments will be long-term in nature they will be exposed to longer-term risks. This means sustainability concerns should be taken into account and TPR highlight potential issues including climate change, unsustainable business practices and unsound corporate governance. It concludes that risks of these types could be financially significant both over the short and longer-term.
The ‘how to’ guide also focuses on investment stewardship and encourages trustees to engage with fund managers on their stewardship policies and where appropriate seek to influence them.
Simon Howard, Chief Executive of UKSIF, said: “We welcome The Pensions Regulator’s new code of practice for defined-contribution schemes and specifically the publication of accompanying ‘how to’ guides. The guide on investment governance is particularly welcome and we were pleased to see our opinions have clearly been taken on board by the regulator and at times directly reflected in the wording of the guidance.
This is great news for trustees of DC schemes who have for the first time since the Law Commission’s work in 2014 had their responsibilities clarified by the regulator. As ever, more can be done, and we look forward to working with The Pensions Regulator to ensure trustees of defined benefit schemes also receive the same clarification.”
A Good Look At How Homes Will Become More Energy Efficient Soon
Everyone always talks about ways they can save energy at home, but the tactics are old school. They’re only tweaking the way they do things at the moment. Sealing holes in your home isn’t exactly the next scientific breakthrough we’ve been waiting for.
There is some good news because technology is progressing quickly. Some tactics might not be brand new, but they’re becoming more popular. Here are a few things you should expect to see in homes all around the country within a few years.
1. The Rise Of Smart Windows
When you look at a window right now it’s just a pane of glass. In the future they’ll be controlled by microprocessors and sensors. They’ll change depending on the specific weather conditions directly outside.
If the sun disappears the shade will automatically adjust to let in more light. The exact opposite will happen when it’s sunny. These energy efficient windows will save everyone a huge amount of money.
2. A Better Way To Cool Roofs
If you wanted to cool a roof down today you would coat it with a material full of specialized pigments. This would allow roofs to deflect the sun and they’d absorb less heat in the process too.
Soon we’ll see the same thing being done, but it will be four times more effective. Roofs will never get too hot again. Anyone with a large roof is going to see a sharp decrease in their energy bills.
3. Low-E Windows Taking Over
It’s a mystery why these aren’t already extremely popular, but things are starting to change. Read low-E window replacement reviews and you’ll see everyone loves them because they’re extremely effective.
They’ll keep heat outside in summer or inside in winter. People don’t even have to buy new windows to enjoy the technology. All they’ll need is a low-E film to place over their current ones.
4. Magnets Will Cool Fridges
Refrigerators haven’t changed much in a very long time. They’re still using a vapor compression process that wastes energy while harming the environment. It won’t be long until they’ll be cooled using magnets instead.
The magnetocaloric effect is going to revolutionize cold food storage. The fluid these fridges are going to use will be water-based, which means the environment can rest easy and energy bills will drop.
5. Improving Our Current LEDs
Everyone who spent a lot of money on energy must have been very happy when LEDs became mainstream. Incandescent light bulbs belong in museums today because the new tech cut costs by up to 85 percent.
That doesn’t mean someone isn’t always trying to improve on an already great invention. The amount of lumens LEDs produce per watt isn’t great, but we’ve already found a way to increase it by 25 percent.
Maybe Homes Will Look Different Too
Do you think we’ll come up with new styles of homes that will take off? Surely it’s not out of the question. Everything inside homes seems to be changing for the better with each passing year. It’s going to continue doing so thanks to amazing inventors.
ShutterStock – Stock photo ID: 613912244
IEMA Urge Government’s Industrial Strategy Skills Overhaul To Adopt A “Long View Approach”
IEMA, in response to the launch of the Government’s Industrial Strategy Green Paper, have welcomed the focus on technical skills and education to boost “competence and capability” of tomorrow’s workforce.
Policy experts at the world’s leading professional association of Environment and Sustainability professionals has today welcomed Prime Minister Teresa May’s confirmation that an overhaul of technical education and skills will form a central part of the Plan for Britain – but warns the strategy must be one for the long term.
Martin Baxter, Chief Policy Advisor at IEMA said this morning that the approach and predicted investment in building a stronger technical skills portfolio to boost the UK’s productivity and economic resilience is positive, and presents an opportunity to drive the UK’s skills profile and commitment to sustainability outside of the EU.
Commenting on the launch of the Government’s Industrial Strategy Green Paper, Baxter said today:
“Government must use the Industrial Strategy as an opportunity to accelerate the UK’s transition to a low-carbon, resource efficient economy – one that is flexible and agile and which gives a progressive outlook for the UK’s future outside the EU.
We welcome the focus on skills and education, as it is vital that tomorrow’s workforce has the competence and capability to innovate and compete globally in high-value manufacturing and leading technology.
There is a real opportunity with the Industrial Strategy, and forthcoming 25 year Environment Plan and Carbon Emissions Reduction Plan, to set long-term economic and environmental outcomes which set the conditions to unlock investment, enhance natural capital and provide employment and export opportunities for UK business.
We will ensure that the Environment and Sustainability profession makes a positive contribution in responding to the Green Paper.”