Social factors taskforce launches guidance with support from Minerva

March 14th, 2024

The UK’s Taskforce on Social Factors has released its handbook on social risks and opportunities for pension trustees to consider.

The guide was developed with the help of Minerva CEO Sarah Wilson, who has served as a member of the taskforce since it was established by the Department for Work and Pensions (DWP).

The initiative aims to support pension scheme trustees and the wider industry with the key challenges around managing social factors.

The guide is designed to assist pension trustees in embedding social factors within schemes’ investment decisions and stewardship policies.

It is split into three sections, the first exploring why social factors are significant from an investment perspective and how taking them into consideration aligns with pension trustees’ fiduciary duties.

It outlines how social factors are inseparable from business and investments, as businesses both cause and are affected by social impacts such as workforce conditions, remuneration practices and bribery.

It also offers guidance on how pension trustees can effectively analyse social factors and understand their salience and materiality.

The second section assesses the data trustees can use to manage social factors in investment, and also includes a materiality assessment framework to help prioritise areas for action.

The final section sets out a framework for addressing social factors in pension schemes, providing baseline, good and leading practice indicators. This section also includes a deep dive into the issue of modern slavery and how trustees can approach this social factor in their investments.

The guide also offers recommendations from members of the taskforce, including Minerva, for pension trustees, government bodies and asset managers.

The Pensions and Lifetime Savings Association (PLSA) recently released its Stewardship and Voting Guidelines 2024, which utilised Minerva Analytics data as supporting evidence.