ESG is an investment framework, with specific focus on three areas:
- Environmental impact is perhaps the most obvious and talked about factor. It covers fossil fuels, single-use plastic, palm oil plantations and the many other activities that threaten our climate and ecosystems.
- Social responsibility addresses considerations such as the opioid crisis, gambling addiction, gender discrimination and human rights abuses.
- Governance standards consider the systems in place to manage cyber security, accuracy of reported accounts, gender diversity on boards, executive pay, and many other indicators of how well a company is being run.
How does it affect my Personal Account?
The Trustee is incorporating ESG principles into its process for evaluating the appropriateness and effectiveness of the fund managers it has appointed. ESG principles are also considered as part of the process for selecting new managers.
You can read more about how the Trustee makes investment decisions in our Statement of Investment Principles. The latest version is available to view or download in the Document library on the Scheme website.