September 2020

07Sep

US. DOL´S mixed message for plan sponsors

The Labor Department is on a tear. In recent actions, it has opened the door for sponsors of defined contribution retirement plans to consider adding alternative investments such as private equity to their lineups. And it also sent a stern warning for both defined benefit and DC plan sponsors over including investments with an explicit ESG focus. More recently, it has proposed blocking an ERISA plan sponsor's ability to vote a proxy unless the issue has an economic impact on...

September 7, 2020
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04Sep

ESG Investing: Theory, Evidence, and Fiduciary Principles

By Max M. Schanzenbach, Robert H. Sitkoff Trustees and other investment fiduciaries of pensions, charities, and personal trusts, and those who advise them, face increasing pressure to rely on ESG factors in the investment management of tens of trillions of dollars of other people’s money. At the same time, however, confusion abounds about the intersection of fiduciary principles and ESG investing. This article cuts through that confusion to provide guidance about when and how ESG investing by trustees and...

September 4, 2020
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02Sep

European Pensions Lead Adoption of ESG Investments

While the United States is beginning to take notice of investments backed by environmental, social and governance principles, the majority of European pensions have already adopted the ESG theme. According to Mercer’s most recent European Asset Allocation Survey, the majority of European pension funds now incorporate environmental, social, and governance risks into their investments, compared to just two years ago when less than half even considered ESG as an option, Chief Investment Officer reports. The survey results showed that...

September 2, 2020
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August 2020

28Aug

US. The Future for ESG Investing in Retirement Plans

The department of labor (DOL)’S proposed rule on environmental, social and governance (ESG) investment practices, published in June, intended to add clarity to years of obscure regulatory guidance. Instead, it’s created a layer of complexity among fiduciaries and has fueled more than 1,000 critical comments. The proposed regulation restates that plan sponsors in defined contribution (DC) plans cannot disregard financial approaches in an effort to pursue ESG-related considerations without violating their fiduciary duties under the Employee Retirement Income Security...

August 28, 2020
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27Aug

European pension funds increasingly take ESG into account – Mercer

An increasing percentage of European pension funds are now taking climate-change risk into account when it comes to investment allocations, with awareness of ESG-related risks also on the rise. Read also Greece. Wave of Pension Applications Swamp Overwhelmed Greek System Consultant Mercer's latest European asset allocation insights survey found that 54% of respondents actively consider the impact of climate change-related risks on their investments, up from 14% in a 2019 survey. Read also UK. Taking action on climate risk: improving...

August 27, 2020
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21Aug

US. Sustainability Matters: Overwhelming Opposition to Proposed Regulation Limiting the Use of ESG in Retirement Plans

The U.S. Department of Labor has proposed a rule that would limit the use of investments that consider environmental, social, and corporate governance factors in worker retirement plans subject to ERISA, including 401(k) plans. Read also US. DOL Issues New Rules On Retirement Plan Income Disclosures The proposed rule questions the financial materiality of ESG issues and assumes that ESG-focused investment strategies and funds are primarily focused on providing “nonpecuniary” benefits, often at the expense of “pecuniary” benefits, otherwise known...

August 21, 2020
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19Aug

ESG head exits €92bn Danish pension fund giant

PFA Asset Management’s head of ESG, Andreas Stang, has left the firm to join insurance and pension company Topdanmark. As part of his new role, Stang will take charge of responsible investments and ESG integration. Topdanmark said his appointment is part of its increasing focus on responsibility and sustainability. He has been head of ESG at PFA Asset Management for over four years. The group oversees DKK 688bn, which equates to around €92bn. Prior to that he was chairman...

August 19, 2020
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14Aug

G7 Pensions: ESG, SDGs, Green Growth and the Road to Camp David

By M. Nicolas J. Firzli The ‘COVID Crisis’ has accelerated the mainstreaming of SDG-driven investment, with pension board members (trustees) playing an increasingly active role across all asset classes, from Sacramento to Sydney: governments (debt) and CEOs (equity) are having to commit more seriously to pressing environmental, social and societal matters, or face the risk of abrupt divestment (Brazil, Facebook etc.). Beyond financial economics and investment policy, the advent of fiduciary capitalism will have a profound impact on the...

August 14, 2020
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July 2020

29Jul

UK pension scheme NEST tightens climate change policy

The move by the scheme, which invests the retirement savings of 9 million workers, is one of the most ambitious to date and comes as regulatory pressure builds for the industry to better manage climate-related risk. As well as the effects of climate change such as rising sea levels and more extreme weather, companies are at risk of costs associated with regulatory change and litigation linked to the transition to a low-carbon economy. "Just like coronavirus, climate change poses...

July 29, 2020
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28Jul

US. DOL’S ESG proposal would hurt retirement accounts

The Department of Labor lost an opportunity to encourage investors to support causes that they hold close to their hearts with a proposed rule regarding the investment choices they’re allowed in their retirement accounts. It’s a proposal that also could end up damaging Americans’ retirement security long-term if allowed to become part of the Employee Retirement Income Security Act. The June 23 proposal reaffirmed standard thoughts on fiduciary responsibilities that suggest only financial risk and returns can be considered...

July 28, 2020
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