The 12-week information collation period will seek views on how pension scheme trustees understand social factors and how they are included in their environmental, social, and governance (ESG) policies.

Environmental, social, and governance (ESG) criteria are an increasingly popular way for investors to evaluate companies in which they might want to invest.

Social criteria examine how a business manages relationships with employees, suppliers, customers, and the communities where it operates. Social factors also include issues of diversity, gender and the empowerment of women.

The government says social factors can present a wide range of potential risks to a scheme’s investments, but they can also present lucrative investment opportunities.

Responses to the call for evidence will help inform the government on the steps needed to ensure that trustees are better able to meet their legal ESG obligations.

This will help increase policymaker and industry understanding of what is currently being done, and what more could be done, to ensure both the risks and opportunities presented by social factors are adequately considered by pension schemes.

Guy Opperman, minister for pensions, said: “I’m proud of the progress we have made in bringing environmental and climate issues up the pensions agenda, helping make pensions fit for 21st century challenges.

“But climate change should not be trustees’ sole consideration. Financially material social factors also pose risks to schemes’ investments, which is why we’re launching this call for evidence to understand what more can be done by industry and policymakers to protect savers.

“By considering the risks – and opportunities – relating to supply chains and communities, employees and business models, local economies and landscapes, investment strategies can better deliver long-term value.”

The call for evidence period begins on 24 March 2021 and runs until 16 June 2021.