03rd December 2021

Stoneport releases its ESG Ambitions Statement to offer smaller DB schemes an affordable way to manage ESG integration

Stoneport, the UK consolidator for small defined benefit (DB) schemes, is delighted to announce the publication of its ESG Ambitions Statement, which includes its ESG (Environmental, Social and Governance) and stewardship policy.

Stuart Southall, Chair of Trustees of Stoneport commented, “ESG investing has become increasingly important for pension schemes. Last year, research from River and Mercantile[i] found that the vast majority (98 per cent) of DB pension scheme trustees viewed environmental, social and governance (ESG) integration as a pressing priority for the year ahead.”

“However, there are challenges for smaller DB schemes developing their own ESG policies – they are costly to put in place, hard to manage administratively which means that some schemes will be deterred from embedding ESG in their reporting and creating policies ahead of any future regulation.”

Stoneport’s solution is to run one ESG policy for all members that join its consolidator scheme. All the costs, governance and reporting requirements are taken care of by trustees at Stoneport and employers, sponsors and trustees in the scheme will be able to communicate their ESG credentials to their members at a much lower cost than if they were to go it alone.

Discussing ESG, Southall says, “When schemes look at ESG – most focus on the E first – the environment issues, which is important. A good example of this being Luton Council recently voting for its pension fund to disinvest £40m from fossil fuel firms.. However, the social and governance are equally as important.”

Stoneport says that while social can be difficult to quantify, schemes have an obligation to understand how the companies they invest in approach social responsibility and treat their people. How well these companies are governed is a critical consideration too, as research shows good governance can enhance the profitability of companies and improve asset returns for members.

Southall adds, “By running one ESG policy for all members who join our scheme, smaller schemes don’t have to lose out and can demonstrate their commitment to ESG to their members.”

The ESG policy is another milestone for Stoneport, who last week appointed Mobius Life Ltd as their investment platform provider. The company also recently announced the publication of its DB Master Trust Self-Certificate, part of a ground-breaking initiative set in train by the DWP and supported by the Pensions and Lifetime Savings Association.

[i] https://www.pensionsage.com/pa/ESG-integration-a-pressing-priority-for-DB-schemes-in-2021.php