The UK’s Pensions Regulator’s code of practice for defined contribution (DC) pension schemes, (“DC Code”) which sets out the standards that pension trustees need to meet to comply with legislation, came into force come into force on 28 July 2016. In addition to the Code, The Pensions Regulator (TPR) introduced guidance on considering ESG factors when making investment decisions in its revised code of practice 13: “Guide to Investment governance“.

Trustees of DC schemes are required to develop a Statement of Investment Principles (SIP) which includes sections about:

  • Exercise of ownership rights including a Voting Policy
  • Social Environment or Ethical or ESG considerations
  • Sustainability
  • Stewardship Code

DC investment strategies are designed to be long term, and there is strong evidence that well-run companies with strong environmental, social and governance practices are more like to sustaining long-term success and profitability.

For most DC pension schemes, stewardship and engagement is likely to be undertaken by the investment manager on behalf of the trustee board, particularly if investments are made via pooled funds. Nevertheless, the Pensions Regulator is encouraging DC boards to become familiar with their managers’ stewardship policies and where appropriate, seek to influence them.

The TPRs guidance reflects the Law Commission’s 2014 fiduciary duty clarifications which state that trustees can take account of financially material ESG risks. Although the pursuit of a financial return will be a pension trustee’s primary concern, UK law allows them to take other, so-called “non-financial” concerns into account where they believe scheme members share their view and there is no risk of significant financial detriment to the fund.

Supporting DC Fund Stewardship

Minerva provides a range of services to support DC funds with their investment responsibilities.


Good stewardship includes the exercise of voting rights and assessing the ESG risks inherent in the portfolio. Minerva’s Governance Watch services helps with the development of the stewardship components of your SIP, portfolio ESG risk monitoring, consolidated vote reporting and trustee training.

AMNT Red Lines Voting

To support DC funds wishing to implement some or all of the Association of Member Nominated Trustee’s Red Line Voting guidance, Minerva has developed the Red Line Monitor service. Trustees can create a bespoke policy for comparing their fund managers’ voting against each of the AMNT’s Red Lines as well as measure the overall impact of the Red Lines against their entire portfolio holdings.

Transition Pathway Initiative

Minerva also supports the implementation of The Transition Pathway Initiative which is focussed on understanding and addressing climate change risk and governance.

For more information about Minerva’s DC Governance & Stewardship solutions please contact us by telephone or email.

Telephone: +44 (0)1376 503500 | Email:

Last Updated: 11 January 2024