Pensions Minister, Paul Maynard, has provided more detail on plans to examine fiduciary duty, including plans to review current climate change disclosures, and consult on bringing investment consultants within the Financial Conduct Authority's (FCA) regulatory perimeter.

The Work and Pensions Committee (WPC) chair, Stephen Timms, previously wrote to Maynard to ask for more details about the Department for Work and Pensions' (DWP) plans to engage with industry on fiduciary duty issues.

In his response, written prior to the news of a summer general election, Maynard confirmed that the DWP had organised a number of roundtables for May and June 2024 to discuss the current legal interpretation of fiduciary duty and the barriers faced by trustees.

This would be followed by a second roundtable that will attempt to use this insight to determine the most effective and practical option to provide the clarification necessary.

In the letter, Maynard acknowledged that some stakeholders within the industry are calling for additional guidance, whilst others are seeking changes to existing legislation.

However, he argued that "it would be wrong of us to prejudice the outcome of any action we may take before we have had a chance to hear from a wide selection of stakeholders, with the aim of building a consensus for what is needed".

Despite this, Maynard confirmed that DWP would be starting from a base in which the law has been clarified by the Law Commission previously, particularly the confirmation that pension scheme trustees should take into account financially material environmental, social and governance (ESG) factors.

"What these factors are, and whether or not they are financially material to a particular investment, is a matter for the trustees to judge, based on appropriate advice," he stated.

"Where trustees are looking at non-financially material factors, such as those relating to quality of life, there is still scope to take these into account also."

On the topic of trusteeship more broadly, Maynard confirmed that the DWP is supporting The Pensions Regulator in developing and implementing a trustee register, which will enable better data analysis and targeted support for the trustees who need it most.

In addition to this, in terms of investment consultants, Maynard revealed that HM Treasury is intending to consult on the Competition and Market Authority’s recommendation that investment consultants be brought within the FCA’s regulatory perimeter.

He confirmed that DWP is also planning a post-implementation review of the Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations 2021 - requirements relating to reporting in line with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations - for the second half of 2024.

In particular, Maynard noted recent industry concerns around the quality of climate scenario analysis, confirming that DWP has been working with regulators, welcoming progress within the industry to ensure that scenario analysis models support effective decision-making and will look to acknowledge the issue in the review.

"However, we do not believe that the government should mandate which models should be used by pension schemes," he added.

"It is important that modelling which considers climate, ESG and wider sustainability factors is allowed to develop and evolve as data availability increases."

Since the letter was written, however, Prime Minister, Rishi Sunak, called a snap election for 4 July, leaving plans for the second half of the year in limbo.

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