In its updated annual stewardship and voting guide, the UK’s Pensions and Lifetime Savings Association (PLSA), whose members are responsible for approximately £1 trillion ($1.28 trillion) in pension assets, said plan investors need to hold the directors of the companies they invest in accountable for the way they manage climate change risks.

The guidelines are intended to be a resource to provide pension trustees with practical guidance when considering how to exercise their votes at annual general meetings. The PLSA said the guide is particularly relevant this year because of new regulations introduced in October that require trustees to disclose how they include financially material environmental, social, and governance (ESG) factors in their investment decisions.

“Recent years have brought in a new regulatory regime on stewardship and growing stakeholder interest in, and scrutiny of, how pension scheme investors are holding companies and management to account on financially material environmental, social and governance (ESG) issues,” the guide says.

“There is a growing body of evidence to demonstrate that active and engaged shareholders can have a positive impact on corporate performance.” The guide also includes a section on climate change and sustainability, reflecting pension plans’ increased focus on ESG and the growing number of climate-related resolutions at companies’ annual general meetings.

The PLSA said it believes climate change is a “systemic issue” that affects nearly every industry and firm. It said that, while climate change will impact some sectors more than others, it is likely that most companies will need to assess its effect on their strategy and business model.

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