Moved by
Lord Razzall
58F: After Clause 73, insert the following new Clause—
“Fiduciaries: performance of investment functions
(1) In the performance of any investment functions, a fiduciary must act in the way the fiduciary considers, in good faith, would be most likely to be for the benefit of the beneficiaries as a whole and to be fair as between the beneficiaries, including as between present and future beneficiaries and in doing so, the fiduciary may have regard (amongst other matters) to—
(a) the likely consequences of any investment activities in the long term,
(b) the impact of any investment activities on the financial system and the economy,
(c) social and environmental considerations, including—
(i) the implications of social and environmental factors for return on investments, and
(ii) the impact of any investment activities on communities and the environment,
(d) the implications of any investment activities for beneficiaries’ quality of life, and
(e) the views, including the ethical views, of beneficiaries.
(2) If a fiduciary considers that the general adoption by market participants of a particular standard of conduct has been or would be conducive to the benefit of the beneficiaries, the fiduciary may observe and promote the standard notwithstanding any rule of common law or equity which might otherwise oblige the fiduciary to act contrary to the standard or to require or influence any other person to do so.
(3) In this section—
“beneficiaries” means persons for whose benefit investments are being, will be or may be applied, whatever the particular form of ownership under which investments are held for the time being;
“benefit” includes—
(a) financial benefit provided out of investments; and
(b) any benefit which the fiduciary considers can be conferred on beneficiaries without any material prejudice to long-term return on investments;
“fiduciary” means a person or institution to which this section applies;
“investment activities” means any actions taken in the performance of any investment functions;
“investment functions” includes (amongst other matters) such of the following as pertain to the particular description of fiduciary—
(a) the selection, retention and realisation of investments,
(b) the exercise of rights, including voting rights, attaching to investments,
(c) engagement with the managers of investee companies and other investee entities, including in relation to corporate governance and corporate actions,
(d) the selection, appointment and monitoring of investment managers and other agents to whom the fiduciary delegates any investment functions,
(e) the selection and ongoing review of any investment funds which are operated by institutions acting as principals and in which the fiduciary invests,
(f) the selection, appointment and monitoring of investment consultants and of other advisers in relation to the performance of any investment functions,
(g) advising or assisting another fiduciary in relation to the performance of any investment functions,
(h) taking such steps as the fiduciary considers reasonable to ascertain the views of beneficiaries in relation to the fiduciary’s investment activities, and
(i) collective action with other market participants to further any common interests;
“investments” means the investments in relation to which any investment functions are performed and, where the context admits, includes assets of any kind representing such investments;
“standard of conduct” includes (without limitation) a standard which a fiduciary considers to be in accordance with—
(a) widely accepted norms of behaviour relating to environmental, social or governance issues, including any such norms set out in international conventions, voluntary codes of practice or otherwise, or
(b) the views or values of beneficiaries.”