The Pensions and Lifetime Savings Association (PLSA) has published a consultation seeking views on its new Responsible Investment Quality Mark (RIQM).

The RIQM is intended to recognise pension schemes that meet the ‘highest standards’ for incorporating environmental, social and governance (ESG) factors into their operations.

The consultation is open until 3 September and the PLSA plans to launch the final standards in October, ahead of COP26.

Speaking at the PLSA ESG Conference 2021, PLSA chief executive, Julian Mund, said that the organisation was “going to bring our industry together” with the standards, which will record and demonstrate the good work and progress being made on responsible investment.

“It will be a new quality mark that helps people recognise the value of an employee benefit that will have a long-term impact on their lives,” he added.

The proposed assessment process for the RIQM will require schemes to meet minimum standards across seven areas: understanding the needs and interests of their beneficiaries; governance; investment strategy; oversight of stewardship; risk management; the use of metrics and targets; and communication and engagement.

Schemes will be required to provide supporting evidence for each of these areas.

The PLSA has also proposed an ‘RIQM Plus’ accreditation, which will be available to schemes that are exceeding best practice.

PLSA deputy director of policy, Joe Dabrowski, commented: “Some pension funds are already deeply engaged in achieving responsible investment. However, this is a highly complex area so many others are looking for ways to approach the issue. We hope that by creating a new Quality Mark we can both recognise existing best practice and help other schemes understand and develop it.

“Pension funds produce lots of differing documentation to evidence how they are integrating ESG and stewardship across their scheme, but in most cases this information is designed to meet regulatory requirements and is quite hard for most savers to find and interpret. Those schemes that meet our new standard will be able to display a stamp of approval that savers can easily trust and identify with.”

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