Royal London Asset Management Welcomes the Law Commission's report
Thursday, July 03, 2014
Royal London Asset Management (RLAM) welcomes much of the Law Commission’s report, (published July 1st 2014) on the Fiduciary Duties of Investment Intermediaries.
RLAM particularly welcomes the conclusions in the report regarding the role of environmental, social and governance issues in fiduciary duty.
The report promises to be a turning point in the long-running debate about whether fiduciaries and pension trustees are entitled to take into consideration such factors as business ethics, environmental and social issues, corporate governance and the ethics of their beneficiaries.
The Commission’s view is one of disarming common sense, but one that required articulation. Fiduciaries must take such factors into consideration where there is good reason to believe they could impact the ability to deliver on the investment objectives of the trust.
The report explicitly acknowledges RLAM's views that environmental, social and governance (ESG) factors, for example, countries’ responses to climate change, can sometimes materially affect a company's financial performance and that the onus is on fiduciaries to ensure they have the skill and the means to understand and act upon such factors that meet this financial relevance test."
Robert Talbut, Chief Investment Officer, said
“We agree with the Commission that no new legislation is necessary because existing law is sufficiently permissive. RLAM sees the value of considering financial and non-financial information together in order to form a better quality view of an investment’s prospects. This is consistent with fiduciary duty and should encourage an improved approach to stewardship.”
Niall O’Shea, Head of Responsible Investment added
“The Law Commission has done all investors and trustees a service in putting to bed some of the misconceptions that still circulate about whether and under what conditions fiduciaries should take environmental, social and governance factors into account. We expect this report to become the standard textbook when questions of this nature arise, which we hope will now occur less frequently. It empowers trustees, investment consultants and fiduciaries to invest on a more long-term basis.”
For further information please contact:
|Gareth Evans, Head of Corporate Affairs,||020 7 506 6715 or 07919 170069|
Notes to editors
- RLAM’s full response: http://lawcommission.justice.gov.uk/docs/cp215_fiduciary_duties_responses.pdf
- More about the report: http://lawcommission.justice.gov.uk/publications/fiduciary_duties.htm
About Royal London:
Royal London is the largest mutual life and pensions company in the UK with Group funds under management of £73.6 billion. Group businesses serve around 5.3 million customers and employ 2,880 people. (Figures quoted are as at 31 December 2013). The Group is moving to operate all of its UK life, pension and investment business under a new version of the Royal London brand. Royal London Asset Management is now under the new master-brand, and the Scottish Life, Scottish Provident and Bright Grey brands will migrate by the end of 2015.