With social issues rising up on the sustainability agenda for investors, it was very positive to see an announcement over the summer of a new UK taskforce dedicated to addressing the social element in investing.

This came only a week after the former Prime Minister, Boris Johnson, confirmed his resignation from office and it followed a number of unfortunate setbacks on sustainable finance and climate policies in the UK.

Positive green finance initiatives such as the UK’s ‘green taxonomy’, mandatory climate transition plans, sustainability disclosures, as well as broader climate measures committed to at COP26, appeared to have lost momentum.

The creation of the UK’s social issues taskforce, led by the Department for Work and Pensions (DWP), seemed a rare environmental, social and governance (ESG) ‘policy win’ for sustainable investors.

Confirmed by then Pensions Minister, Guy Opperman, in mid-July, the taskforce’s stated aim is to better support the UK’s pension industry to address social issues in their investments. It will look to assist pension scheme trustees to overcome some of the barriers in managing and integrating material social factors on behalf of their beneficiaries, such as the lack of common metrics and reliable data.

The diversity of social factors (and their highly subjective nature)- from human capital to supply chain conditions, the ‘just transition’, human rights, and diversity- is another reason why addressing social issues in investments has proved challenging.

The work of the taskforce is potentially very promising for pension schemes, and their clients and savers, and there is a strong case for the incoming Conservative government to maintain its momentum.

We are hopeful the taskforce could contribute towards the swift development of new resources, tools, and standards for pensions schemes on social risks and opportunities too. It would ensure that schemes’ focus on social issues continues to strengthen, and potentially help firms in better fulfilling their fiduciary duties to clients.

Above all, the UK needs to begin adopting concrete steps to demonstrate it intends to take social issues as seriously as environmental issues, which will be necessary for the UK to progress towards net-zero.

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