Roger Mattingly is Director of PAN Trustees, a leading firm of independent trustees working with some of the largest pension schemes in the UK.
Roger, you’ve been working in the UK pensions industry for 37 years. In your experience, are pension schemes taking environmental and/or social factors into account alongside financial returns?
There is a fairly cosmetic approach to these issues. Many schemes pay lip-service to them in their investment principles saying that those factors are taken into account, but, to date, this has mainly been a box-ticking exercise. The Law Commission review (Fiduciary Duties of Investment Intermediaries) in 2014 stipulated that social and environmental impact and ethical standards should be taken into account, but ultimately it is performance that matters.
That said, there has been an increase in the focus on such responsibilities among investors. A trend took root a few years ago, but so far there has been a lot of rhetoric. Have things really changed materially? Not really.
We may see an inflection point where it is taken more seriously and investors have to evidence that environmental and social impacts have been meaningfully considered and taken into account. There will be an acceleration in this regard and a mandatory requirement may also come to fruition.
What do you think would spark that kind of inflection point?
It could come out of the corporate governance review from 10 Downing Street. Recent events, such as the BHS debacle, have highlighted the moral deficiencies that exist within corporate Britain and there is certainly an absolute desire to address those deficiencies under Theresa May’s leadership. That will have to happen at the company level, but institutional investors will also likely see regulation pressurising them to make sure companies are addressing those concerns as part of their investment process. Trustee boards will likely have to evidence that they have reassured themselves as much as physically possible that, at the very least, their investment managers and the companies they are ultimately investing in are not morally deficient.
What was your main learning from 2016?
That the dust never settles. There is no such thing as ‘business as usual’ and to think that might ever happen would be naïve. The dust will always be flying around and the most important thing is to make sure you’re as aware as possible of everything that is going on at all times.
Did you make any New Year’s resolutions?
To read the complete works of George Bernard Shaw as I live in the same village in Hertfordshire where he lived and died. I’m on my fourth play so far…
Roger is Managing Director of PAN Trustees Limited having been a main board director of two major employee benefit and actuarial consultancies in a pensions career spanning over 37 years. He is a Past President of the Society of Pension Professionals, chairs the Pensions & Life Savings Multi Employer DB Committee, chairs the Incentive Exercises Industry Forum, has been a member of the Pensions Regulator’s Stakeholder Advisory Panel and on various DWP Policy Engagement and industry steering groups. He is a Fellow of the Institute of Directors, on the editorial panel of Pensions: An International Journal, chairs many trustee boards, and is a member of a major Independent Governance Committee.
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