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GAPP confirms plans for ESG framework

03 December 2021

The Guernsey Association of Pension Providers (GAPP) is continuing its leadership in the international retirement and saving plans space by announcing plans to work on an Environmental, Social and Governance (ESG) framework for its members.

GAPP President Stephen Ainsworth said the move was in response to indications that more members would welcome guidance on the growing emphasis on ESG issues for pension plans.

Although there is no fixed timescale for its release, as GAPP wants to ensure enough time is spent getting the framework right, there is a hope that it can be published around mid-2022.

“Pension plan members are starting to question how their pension assets are being invested and are demanding ESG-friendly options,” Stephen said. “As a result, the GAPP Committee decided to create a specialist ESG committee to research the issues. We rapidly concluded that the guidance should be within an overarching framework, and so we needed to start with that.”

“Guernsey has for many years been the leading location for international retirement and savings plans and has provided thought leadership in the international pensions space. The ESG Framework is just the latest aspect in this ongoing development.”

It is anticipated that the framework will adopt a similar structure to that of the Guernsey International Insurance Association’s (GIIA) framework, launched at WE ARE GUERNSEY’s Sustainable Finance Week in June 2021, including sections on governance, benefit provision, investments and reporting.

“We were aware of the insurance framework developed by GIIA, and the positive reaction that there had been to its publication,” Stephen said. “Because of the many similarities between insurance business and pensions business, this seemed like a good place to start.

“When we looked at the GIIA framework in detail we felt that several of the concepts were equally as valid for pensions as insurance. We have met with GIIA and have been encouraged by their reaction when they learned that we might develop a parallel framework for pensions.”

Stephen said there were plenty of ways that pensions, or pension providers, could adhere more to ESG issues.

“There are very substantial assets invested in Guernsey-based pension plans,” he elaborated. “Investing these assets responsibly and sustainably can make a significant contribution to improving the environment.

“Indeed, generally speaking, a pension plan member can make a much greater contribution to combatting climate change by investing their pension assets responsibly than by ceasing air travel or adopting a vegan diet!”

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