The Impact Investing Principles for Pensions have been updated to help UK pension fund trustees better align their investment decisions with long-term impact goals and fiduciary duties.

Originally launched by the Impact Investing Institute and Pensions for Purpose in 2020, the principles have been revised to reflect five years of market experience and legal changes, including rising expectations from pension savers and evolving regulatory demands.

The updated guidance, which also includes The Global Impact Investing Network’s "significant" contribution and endorsement, seeks to enhance the original version, ensuring it makes a difference for all pension schemes, regardless of their size, structure, or starting point.

In particular, the refreshed principles are designed to encourage pension schemes to set impact goals that reflect the needs and values of their beneficiaries, such as housing and services, climate change mitigation and community wellbeing.

It also aims to establish accountability by connecting impact priorities to incentives and clearer reporting, helping schemes move from intentions to outcomes.

In addition to this, the updated guidance also seeks to motivate trustees to go beyond merely gauging intent, in order to also evaluate the “tangible” scale, speed, and effectiveness of the impact achieved.

They also seek to empower trustees to move beyond conventional stewardship approaches such as voting and engagement, to use their capital more strategically, to actively shape markets, influence policy and drive meaningful corporate behaviour.

All UK pension schemes – defined benefit, defined contribution, trust, or contract-based – are invited to adopt the principles, with a statement of commitment available for those wanting to embed them into governance and investment processes.

“Impact is everywhere and in everything, but the intention to have a positive impact on people and planet isn’t,” Pensions for Purpose CEO, Charlotte O’Leary, said.

“Trustees are being shown how to intentionally deliver returns and responsibility, not choose between the two.

"These principles are a public good, freely available to support trustees, by focusing on measurable actions – such as investing in affordable homes, clean water and energy – this is extending beyond meeting member expectations, to protecting their savings from the systemic risks already battering portfolios.

“This is extending beyond meeting member expectations, to protecting their savings from the systemic risks already battering portfolios. This is fiduciary duty in a world defined by climate shocks and inequality."

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