Pensions Regulator publishes blog on trusteeship and managing systemic risk

The Regulator has published a blog outlining how managing systemic risk is a “core part” of effective trusteeship and highlighting that trustees' fiduciary responsibilities include understanding and managing risks such as climate change and nature loss where they are financially material. 

The blog describes strong investment governance as “essential”, especially in complex areas such as ESG and private markets. The Regulator is raising its expectations around investment governance, and the blog calls for trustees to ensure that decisions are “long-term, well-evidenced and subject to appropriate challenge”. 

Trustees are expected to ensure that their investment strategies are resilient, well-informed, and focused on long-term outcomes. The Regulator recommends the use of the Taskforce on Nature-related Financial Disclosures (TNFD) framework and has joined the UN Global Compact to strengthen its own capabilities. 

It has also updated its Trustee Toolkit and consolidated its ESG guidance.