Trustees of UK Pension schemes requiring ESG Template under the direction of the PLSA......what's your LEI?
The United Kingdom Pensions & Lifetime Savings Association (PLSA) have directed that the trustees of UK Pension Schemes are required to complete an ESG Template. First order of business on the template?.....
What is your LEI?
Environmental, Social and Governance (ESG) has become more prominent in recent times with regards to financial services, pension schemes and investments.
ESG policies are concerned with environmental, social and governance factors that may affect the performance of a company or asset.
The PLSA are encouraging responsible investment and market participation by way of ESG reporting duties. This will force pension schemes to at least consider how they factor in the importance of ESG risks in their business decision making policies.
To date, the key focus for trustees of UK Pension Schemes has been to maximise returns. However, recent rules drafted by the Department for Work and Pensions (DWP) require UK pension schemes to clarify and explain their policies surrounding ESG (including climate change) factors.
The PLSA have now issued a template to UK pension scheme trustees which must be completed and filled. One of the requirements is "What is your Legal Entity Identifier?"
If you are a trustee of a UK pension scheme you can find this template below.
UK Pension Schemes also require an LEI for a number of other reporting regulations such as Mifid 2. Click here to find out more about LEIs for pensions schemes. Trustees should also consider the implications of the 2019 changes to the Investment Regulations, which implement the EU’s second Shareholder Rights Directive (SRD II). The second phase of SRD 2 was due in September 2020. SRD is one of many European regulations introduced after the last global recession revealed many weaknesses in the global financial system such as excessive risk taking, lack of transparency with regards to risk analysis, identification of shareholders and complex chains of intermediaries.
These mounting regulatory requirements mean it is becoming increasingly important for firms to have a clear policy around ESG going forward.
Click here to read the PLSA guide on ESG for pension schemes and investment firms.
In a recent interview conducted by the Securities Lending Times, Director of LEI Worldwide spoke with Natalie Turner and took a deeper look the current rate of Lapsed Legal Entity Identifiers globally.
As roughly half a million LEI Codes are now in a state of Lapsed, meaning they have not been renewed in the last year, we discuss how this has happened, and why it is more prominent in some countries rather than others. Some of the primary reasons include LEI which were obtained for regulatory purposes, which regulations which require an LEI, but not necessarily an 'active' LEI. Another reason is management of the LEI and education on the LEI requirement in general.
"Sometimes LEIs lapse because the ownership of the task to renew the LEI changes, people change roles or move on from companies frequently, especially right now in the middle of a pandemic." - Ubisecure's Steve Waite
J.P Morgan has become the first validation agent in the Global LEI system. The validation agent framework which was introduced in September 2020 by The Global Legal Entity Identifier Foundation (GLEIF) in order to increase LEI adoption by accelerating client lifecycle management and reduce LEI registration costs by using existing KYC and AML techniques to replace existing entity validation steps in the LEI issuance process.
J.P Morgan, in partnership with Business Entity Data B.V. (GMEI Utility a service of BED B.V.) have together issued their first LEI. The framework is based on the fact that globally important financial institutions and banks such as J.P Morgan are trusted data sources and are therefore perfectly positioned to verify their customers data to an existing LOU who may then proceed to have an LEI issued, thereby removing a time consuming but necessary step in the LEI issuance process.
Working as a validation agent will allow us to improve our client onboarding experience as well as create valuable industry LEI reference data" - George Brandman, Managing Director, J.P Morgan
The views expressed in this blog belong to LEI Worldwide.