ECON rapporteur sets out stall on investor ESG duties proposal

first_imgPension funds would have to carry out “due diligence” in relation to environmental, social and corporate governance (ESG) factors under amendments to a European Commission proposal that have been tabled by the politician leading the European Parliament’s response.According to Paul Tang, a Dutch national in the parliament’s socialists and democrats group, due diligence means “an ongoing process through which investors identify, avoid, mitigate, account for and communicate about how actual or potential adverse ESG factors and risks are integrated in investment decision-making and risk management systems”.Tang is the “rapporteur” on the Commission’s proposal for a regulation “on disclosures relating to sustainable investments and sustainability risks”, which is part of the implementation of its sustainable finance action plan. He is responsible for leading on the development of the parliament’s position on the Commission’s proposal within the committee on economic and monetary affairs (ECON).Under Tang’s version of the Commission’s proposal, investors would have to carry out due diligence in line with recommendations set out under the OECD’s “guidelines for multinational enterprises”. Tang’s proposed legislative text states that by carrying out due diligence in the prescribed way, investors would “not only be able to avoid negative impacts of their investments on society and the environment, but also avoid financial and reputational risks, respond to expectations of their clients and beneficiaries, and contribute to global goals on climate and sustainable development”.“In doing so, financial market participants will be obliged to move beyond a merely financial understanding of their investor duties,” the text added. The due diligence processes would have to be published on investors’ websites.More specific obligations – such as minimum standards – would be set out under so-called delegated acts to be adopted by the Commission, according to Tang’s proposal.Member consultation, executive pay Source: PVDAPaul Tang MEPThe member of the European Parliament (MEP) has also proposed that pension funds be required to actively consult beneficiaries when deciding what investments would be in their “best interests”.“Without prejudice to the discretion for trustees or responsible appointees for final choice of investment strategy, and in accordance with due diligence processes… the ‘best interest’ of beneficiaries is to be determined in active consultation with beneficiaries,” Tang wrote.Under Tang’s proposal, this requirement would be introduced by way of an amendment to the prudent person rule set out in IORP II, the revised EU pension fund directive that member states have until mid-January to implement.Proposed changes to pension fund regulations in the UK in relation to members’ views have caused concern at the country’s pension fund association. In the EU context, PensionsEurope and some other industry associations have been critical of calls for pension funds to be required to seek members’ views. The MEP has also proposed more demanding requirements in relation to the pay policies of financial market participants, saying they should be used “as a mechanism to avoid unwanted sustainability risks and to encourage sustainable investments”.Under his version of the regulation, executive directors of financial market participants would be required to “set out sustainable investment targets of minimum 50%” when establishing performance measurement criteria for variable pay.The targets could be based on achieving objectives in line with the UN Sustainable Development Goals.Under’s Tang’s version of the Commission’s legislative proposal, financial market participants would also face broader disclosure requirements.Other members of the European Parliament’s ECON committee have until 19 September to table their own amendments to the Commission’s proposal. The MEPs will then negotiate on the committee’s position, with a vote scheduled to take place on 5 November.last_img read more

Commerzbank UK scheme insures DB and DC sections for £1.2bn

first_imgThe UK arm of Commerzbank has insured both its defined benefit and defined contribution schemes with Pension Insurance Corporation (PIC) for £1.2bn (€1.4bn) – the country’s biggest pension risk transfer deal this year.The transaction involved converting a £300m defined contribution (DC) plan into a defined benefit (DB) arrangement, before then being added to the buy-in deal.David Curtis, director at Law Debenture Pension Trustees and chairman of the Dresdner Kleinwort Pension Plan trustee board, said the transaction “required a high level of creative thinking” from consultancy LCP to address the DC section. Curtis also praised PIC for its flexibility on what he described as “an unusual transaction”.The DB and DC funds were both part of the Dresdner Kleinwort Pension Plan, which came to Commerzbank as part of its acquisition of Dresdner Bank in 2009. It follows a bumper year of pension transfer deals for PIC in 2018, including a £1.3bn buy-in with Siemens in July and a £1.5bn buy-in with Rentokil Initial in November.Separately, rival pension insurer Rothesay Life has backed a £110m full buyout of the Laird Pension Scheme, connected to UK electronics company Laird.It covers the benefits of 370 deferred members and 570 pensioners, according to Rothesay Life. The DB scheme is expected to wind up later this year once the transfer is completed.Tom Ashworth, transactions specialist at Willis Towers Watson and lead adviser to the Laird Pension Scheme, said the trustees had come up with “a clear project plan and decision-making framework”, helping to ensure “healthy competition for a complex scheme and ultimately resulting in favourable pricing”.Cleo Taylor, business development director at the insurer, said: “With the rapid improvement in solvency levels, the demand for full scheme buyouts is particularly strong. To meet this demand we have been growing our new business team across underwriting, implementation and business development.”last_img read more

Government to improve effectiveness of the public service

first_img Share Share Share 26 Views one comment Information, Telecommunication and Constituency Empowerment Minister, Ambrose George Government anticipates the execution of a new venture designed to further improve the effectiveness of the public service.Hon. Ambrose George, Minister for Information, Telecommunication and Constituency Empowerment at the launch of Public Service Day last week, spoke of an ‘e-government for regional integration’ project which will soon be realised. He described the venture further.“The creation of this enabling environment allows government to main fully utilise public officers and all developing partners both locally and regionally. This kind of partnership is paramount and is increasingly recognized as necessary for transparent, equitable, sustainable, connected and an inclusive public administration.”Minister George explained the purpose of the ‘e-government for regional integration’ project.“At a regional level we look forward to the implementation of the e-government for regional integration project which aims to promote efficiency, quality and transparency of public service while at the same time achieves economies of scale; to strengthen and harmonize government’s processes, structures and legal frameworks; to provide an enabling environment in the context of global competitiveness.”The telecommunications minister also said that through this environment, the public service and other developmental partners- both locally and abroad will be able to meaningfully contribute to equitable public administration.Government Information Servicecenter_img LocalNews Government to improve effectiveness of the public service by: – July 2, 2012 Tweet Sharing is caring!last_img read more