Recommendations
The Ireland roadmap makes recommendations in four categories:
1. Regulation:
a. The Pensions Authority should ensure that the ESG-related provisions of IORP II are effectively implemented.
b. The Department of Employment Affairs and Social Protection should give the Pensions Authority a leading role in encouraging greater focus on ESG factors for pension funds.
c. The Central Bank should issue guidance to encourage asset managers under its supervision.
d. The Department of Employment Affairs and Social Protection (in conjunction with the Pensions Authority) should require all new pension schemes, including the new master trusts to adopt ESG integration, reporting and investee engagement, in line with the recommendations at point 2 (as relevant).
e. The organisation that will be responsible for the oversight of the Irish pension auto-enrollment system, scheduled to be introduced in 2022, should require all organisations or schemes responsible for the management of these funds to adopt ESG integration, reporting and investee engagement, in line with the recommendations at point 2 (as relevant).
f. The Department of Finance should ensure that all public monies, whether invested directly by a state body or managed on their behalf, are invested in line with responsible investment policies that commit them to ESG integration, reporting and investee engagement, in line with point 2 (as relevant).
g. A review should be carried out by the Pensions Authority of the interplay between the current funding standards and defined benefit pension schemes’ consideration of ESG factors.
2. Capacity building:
a. There is a need to raise awareness and build capacity across certain sectors of the Irish investment chain with regard to responsible investment.
b. Investment consultants have a key role to play in getting responsible investment on the agenda.
c. Institutional investors – including asset owners, asset managers, insurance companies and other government-supported bodies – should ensure they have adequate policies, skills, advice and systems for identifying and managing long-term, systemic risks, such as climate change.
3. Stewardship and intermediation: The Pensions Authority should, as part of its guidance on IORP II, encourage asset owners to make formal commitments to active ownership in their investment strategy.
4. Corporate Reporting: The following principles shape the Department of Business, Enterprise and Innovation’s requirements for corporate disclosures:
1. Regulation:
a. The Pensions Authority should ensure that the ESG-related provisions of IORP II are effectively implemented.
b. The Department of Employment Affairs and Social Protection should give the Pensions Authority a leading role in encouraging greater focus on ESG factors for pension funds.
c. The Central Bank should issue guidance to encourage asset managers under its supervision.
d. The Department of Employment Affairs and Social Protection (in conjunction with the Pensions Authority) should require all new pension schemes, including the new master trusts to adopt ESG integration, reporting and investee engagement, in line with the recommendations at point 2 (as relevant).
e. The organisation that will be responsible for the oversight of the Irish pension auto-enrollment system, scheduled to be introduced in 2022, should require all organisations or schemes responsible for the management of these funds to adopt ESG integration, reporting and investee engagement, in line with the recommendations at point 2 (as relevant).
f. The Department of Finance should ensure that all public monies, whether invested directly by a state body or managed on their behalf, are invested in line with responsible investment policies that commit them to ESG integration, reporting and investee engagement, in line with point 2 (as relevant).
g. A review should be carried out by the Pensions Authority of the interplay between the current funding standards and defined benefit pension schemes’ consideration of ESG factors.
2. Capacity building:
a. There is a need to raise awareness and build capacity across certain sectors of the Irish investment chain with regard to responsible investment.
b. Investment consultants have a key role to play in getting responsible investment on the agenda.
c. Institutional investors – including asset owners, asset managers, insurance companies and other government-supported bodies – should ensure they have adequate policies, skills, advice and systems for identifying and managing long-term, systemic risks, such as climate change.
3. Stewardship and intermediation: The Pensions Authority should, as part of its guidance on IORP II, encourage asset owners to make formal commitments to active ownership in their investment strategy.
4. Corporate Reporting: The following principles shape the Department of Business, Enterprise and Innovation’s requirements for corporate disclosures:
- ESG factors should be disclosed within the annual report, with clear links between ESG factors and the company’s business model and risk factors;
- ESG factors should, over time, be subject to the same levels of assurance as financial data;
- Companies should report using common performance metrics to allow for comparability; and
- Companies should also disclose additional company specific ESG risks and opportunities.