By Kate Granville Smith, Hercules Philipps and Harriet Strachan

The Pensions and Lifetime Savings Association (PLSA) has published its annual update to its Stewardship & Voting Guidelines. Trustees should consider the Guidelines and discuss them with their investment advisers. 

Stewardship and Voting Guidelines 2023 (


The PLSA Voting and Stewardship Guidelines are aimed at scheme investors, their investment service providers and companies interested in using the guidelines as a benchmark for their corporate reporting and investor relation work.

The Guidelines set out a comprehensive framework on how key issues need to be considered by schemes in their stewardship. 

The PLSA have also published a summary guide which helps investors consider what “good company behaviour” looks like, identifies the relevant resolutions and how should investors consider voting.

Stewardship and Voting Guidelines 2023 (

In this article, we look in closer detail at some of the key themes.

Cyber security: 

In section 4 of the Guidelines, ‘Audit, Risk and Internal Control’, there is a focus on cyber security. The guidance addresses the increased risks that companies now face of cyber-attacks, heightened in recent years by the move to home working and the increasingly tense geopolitical situation. The PLSA highlight the need for investors to recognise these risks and to ensure that companies have in place efficient governance and control systems to manage cyber threats appropriately as well as mechanisms for reporting on potential breaches and solutions.



Also within section 4 of the Guidelines, the PLSA look more closely at AI. The PLSA considers that AI is likely to be one of the biggest technological leaps in history, and the Guidelines highlight the ways in which AI has the potential to change the investment landscape requiring investors to be alert to potential new opportunities. 

However, the Guidelines also identify the risks AI presents for businesses such as privacy violations, the amplification of discrimination and the proliferation of misinformation, all of which have been on the rise in recent years. Investors are advised to ensure that companies are accountable for these risks, and their social impact, by aligning with industry ‘good practice’ as it evolves and ensuring existing technology is compliant with new standards and requirements.

Climate change:

In section 6, “Climate change and sustainability”, the PLSA notes an increased focus among members to hold their investment chains accountable to their Net Zero commitment, with a growing expectation of targets and transition plans. According to a PLSA survey from Q4 2023, more than two-thirds of pension funds have a commitment to net zero alignment in place, up from just over half in May 2022. The PLSA believes that climate change- or rather the climate emergency- is a systemic issue affecting nearly every industry and firm and most companies will need to assess the impact of climate change on their strategy and business model in the coming years if they are not already doing so. However, investors should be careful not to ignore non-climate sustainability issue and consider carefully which sustainability issues are most material to holdings in their portfolio, prioritising allocation of stewardship resources appropriately.




In section 6, ‘Climate Change and Sustainability’, the PLSA highlight that whilst it is likely that the topic of climate change has been on the agenda for some time, there are other climate-related sustainability issues which are now becoming increasingly high on many investors agendas, such as biodiversity. The PLSA highlights that the accelerating loss of global biodiversity is resulting in changes to the natural world and having a continued impact on the financial world, creating a knock-on impact to the investments held by pension schemes in sectors tied to biodiversity loss. 

As a result, the PLSA suggests that schemes put managing biodiversity on an equal footing to climate change in terms of urgency and importance. This requires that investors carefully consider which biodiversity-related issues are most material to holdings in their portfolio and prioritise allocation of stewardship resources appropriately. Schemes can also consider voting to support resolutions that seek to encourage companies to address direct or underlying drivers of biodiversity loss and encourage investee companies in at-risk sectors to engage with the Taskforce on Nature-related Financial Disclosures (TNFD) on approaches to better integrate impact on nature into decision-making as well as on approaches to identify and access biodiversity data. 


Social Factors:

In section 7 of the Guidelines, ‘Social Factors and Workforce’, the PLSA focus on social factors. 

The PLSA consider that there is increasing context and momentum for engagement with social topics that may link to pension scheme investments. This is reflected in this new section which advises trustees to assess the materiality of social factors, such as modern slavery, data security and community engagement, and to integrate them into their voting and stewardship policies. The Guidelines state that a sign of the increasing Government prioritisation of this topic was the creation of the Taskforce on Social Factors for UK Pensions Industry which has published a final guide for trustees and advisors.  This guide provides a framework for pension schemes to address social factors which is divided into three levels- baseline practice, good practice and leading practice. 


Considering social factors in pension scheme investments: guide (

The PLSA have also recently published several case studies on how pension schemes can (and are) addressing social factors which you can read here. Putting-the-spotlight-on-social-factors-best-practise-case-studies-Feb-2024.pdf (


Dual-class asset structures.

Finally, in section 8, ‘Capital Structure and Allocation’, the guidelines shine a light on companies with dual-class asset share structures, of which there has been a “significant increase” in the amount of these in initial public offerings in 2023. 

The PLSA highlight that in addition to the gradual removal of shareholder approval for significant transactions, these structures create more risk for investors because they have weakened shareholder rights and this can result in the removal of some important checks and balances on companies moving forwards. 


Burges Salmon are well placed to advise on all aspects of ESG for pension schemes. If you would like to explore this topic further, please contact Kate Granville Smith.