29 June 2018
‘Ireland’s Fiduciary Duty Roadmap’ report provides clear recommendations on policy and market changes required to achieve full ESG integration into core areas of investment practices. These guidelines were published in advance of new EU Directive for pension funds.
In June 2018, United Nations Environment Programme Finance Initiative (UNEP FI), the Principles for Responsible Investment (PRI), and The Generation Foundation in collaboration with SIF Ireland, Ireland’s Sustainable and Responsible Investment Forum, released the Fiduciary Duty in the 21st Century Ireland Roadmap. Ireland is the 10th country in the world to produce this roadmap report, which is a significant milestone for a country of its size.
Irish legislation and common law interpretations of fiduciary duty currently make no reference to ESG issues or to responsible investment. However, Ireland is required to implement a new EU Directive by January 2019, which requires pension funds to publish their position on ESG issues in their statements of investment policy principles (SIPPs). Last month, the European Commission also published its first legislative package under its Action Plan for Financing Sustainable Growth, outlining how institutional investors, asset managers and advisors should integrate ESG factors into the investment decision-making process, as part of the duty to act in the best interests of clients.
The report makes recommendations in four areas – regulation, capacity building, stewardship and intermediation, and corporate reporting. It includes actions for various Irish stakeholders such as; the Central Bank, the Department of Employment Affairs and Social Protection, the Department of Finance, and the Pensions Authority, and how they can begin to incorporate ESG practices into investment planning and decision making.
The PRI, UNEP FI, The Generation Foundation, and SIF Ireland will continue to work closely together to advance responsible investment practice in Ireland.
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Patrick Burke, Managing Director of Irish Life Investment Managers, said; “This roadmap report comes at a time when the world is rapidly changing, with factors such as climate change, population growth and resource scarcity at play, and as a result, investment returns will change in line with these issues. Therefore, considering relevant ESG factors into investment decisions is essential to delivering returns over the medium to long-term for our clients. We are proud to support this important piece of work for our industry and look forward to further embedding Responsible Investing principles into our business”.
Terence O’Rourke, Chair of SIF Ireland, said; “We are delighted with the launch of today’s report. Providing clear recommendations on how best to advance the ESG agenda across all asset classes in Ireland, over the coming months SIF Ireland is looking forward to engaging with government, the regulator and other market players on this important topic, including how best to realise the report recommendations.”
Anastasia Guha, Head of UK and Ireland at the Principles of Responsible Investment said; “Investors have a major role to play in allocating capital flows to sustainable investment strategies. “By incorporating the recommendations in the report, the private and public sectors in Ireland will be well placed to better manage investment risks and take advantage of the new opportunities that looking at ESG affords.”
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Read the Ireland Roadmap here.
Learn more about Fiduciary Duty in the 21st Century here.