Timms backs disclosureMay 1999
UK pensions minister Stephen Timms has said he will look again at the proposed wording of the government’s draft regulations on the disclosure of ethical investment policies.
His announcement has pleased campaigners who felt the draft regulations as they stand would not deliver the commitment in the pensions green paper to encourage funds to ‘consider moral, social and environmental issues in relation to their investments.’
The new version of the regulations is expected to require fund trustees to take a stance on ethical issues in their statement of investment principles.
It will ‘allow members of pension schemes to know, perhaps for the first time, whether such considerations have ever informed the investment planning of their scheme,’ Timms told delegates at the National Association of Pensions Funds investment conference in Eastbourne.
His public statement – the first he has made on the issue since taking up the post – has reassured ethical investment lobbyists who had suspected he might back away from the firm stance taken by his predecessor John Denham.
Denham said last year he was ‘minded to require trustees to disclose to what extent, if any, they have taken account of social and ethical considerations in their investment strategy’. But when the regulation appeared six months ago it said only that pension schemes should ‘consider in a positive way how their funds are invested’.
Penny Shepherd of the UK Social Investment Forum said she was ‘delighted’ with the minister’s new commitment. ‘Some interpreted the proposed wording of the regulations as a dilution of the government’s commitment to socially responsible investment, but Timms’s speech clearly signals continuing government support, and that there will be no watering down,’ she said.
The regulations are likely to set a deadline for funds to publish a statement on ethical performance, but with a generous lead in time.
Timms revealed there were more responses on the ethical investment issue than on any other in the consultation document. Of the 116 responses relating to ethical investment, two thirds were in favour.
The Ethical Investment Research Service (EIRIS) is publishing a Guide for Pension Fund Trustees this summer that details how they can go about developing an ethical investment policy.
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