Incorporate ESG: a legal checklist
Trustees of workplace savings schemes who plan to include ESG considerations in their investment decisions must comply with a raft of statutory and other duties to avoid falling foul of the regulator.
That’s according to David Ireland, a partner at Dentons Kensington Swan, who also warns that the issue of ‘greenwashing’ – making false or misleading claims that a company’s products are environmentally friendly when they’re not – is “squarely on the FMA’s radar”.
Ireland, who is the convenor of the Financial Services Council’s Workplace Savings Committee’s training focus group, told those attending an FSC webinar last week that trustees must ensure the information they’re disclosing to scheme members is correct and that they’re not being hoodwinked by greenwashing.
“Make sure you’re walking the talk – that you can substantiate any claims you’re making about your approach to ESG,” he said. “It all comes down to ‘are we [being]misleading or misrepresenting the nature of the scheme’s investments?’ It comes down to doing your homework and making sure you’ve got your systems in place.”
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