PCD x STEP Isle of Man Conference — The Comis Hotel, 6 May 2026

The first session of the PCD/STEP Isle of Man Conference cut straight to one of the most consequential questions in modern trust practice: can trustees lawfully invest in sustainable or responsible strategies — and if not, what needs to change?

The answer, as a room full of practitioners heard, is complicated. But the direction of travel is clear.

Clearing the Terminological Fog

Chris Moorcroft, Partner at Harbottle & Lewis and one of the leading advocates for trust law reform in this area, opened with a deliberately simple framing. The investment universe, he argued, runs from traditional return-maximisation at one end to pure philanthropy at the other, with a broad middle ground of impact-driven, responsible and sustainable strategies that blend financial and non-financial objectives. Labels matter less than understanding where on that spectrum a client actually sits.

"Once you're clear on that key concept," Moorcroft said, "the confusion around terminology becomes slightly less important."

That clarity matters because what follows is a legal minefield.

The Chilling Effect

At the heart of the debate sits a set of English law cases, most notably Scargill (1985) and the Bishop of Oxford case (1992), which are widely cited as support for the idea that where a trust exists to provide financial benefits to beneficiaries, those interests are primarily financial. A trustee who invests in an impact portfolio that underperforms a conventional benchmark risks criticism — and potentially liability — for having prioritised non-financial objectives.

"That is the crux of the concern," Moorcroft said. "And the fact that it is a concern means there is a chilling effect for trustees."

The dates are telling. Both foundational cases predate the modern ESG investment universe by decades. Scargill, as Moorcroft noted drily, is rather dated by its subject matter. Yet their shadow continues to fall across trust decisions in 2026.

The more recent Butler Sloss case — involving charitable trusts connected to the Sainsbury family — moved the dial somewhat. The court blessed an investment policy the trustees had considered sufficiently restrictive to carry some financial risk, on the basis that it aligned with the charity's broader objectives. But the very fact that they felt obliged to seek court approval proved the point: the law had not kept pace.

What Other Jurisdictions Have Done

Moorcroft then walked the room through a series of legislative responses. Around 2018 and 2019, a wave of US states — Oregon, Georgia, New Hampshire among them — added ESG and values-based investing to the list of factors trustees are required or permitted to consider under the Uniform Prudent Investor Act. The wording varies: Oregon permits trustees to take into account the "intent, desire and personal values of the settlor, including their desire to engage in sustainable and socially responsible investment strategies." Georgia takes an unusually wide view, listing social, political, religious and philosophical values alongside environmental ones.

Then came Bermuda. Last year, following work that included involvement from Edward Cumming KC, the barrister who led for the claimants in Butler Sloss, Bermuda amended its Trustee Act 1975. The change was elegant in its simplicity: it clarified that "other circumstances of the trust" — already a phrase in the existing statute — can include the wishes of beneficiaries and settlors regarding the impact of investments on the environment and wider society. No grand legislative architecture. Just a targeted amendment that removes the ambiguity.

"That's really all that needs doing, I think," Moorcroft said.

The Isle of Man nearly got there first. Around three years ago, draft legislation was prepared that would have added an explicit permission for trustees to have regard to social, ethical, governance and environmental matters. It didn't pass — a story the panel would return to.

The Panel: Real Demand, Real Risk

Andrew Langan-Newton of Keystone Law brought the IOM litigation perspective. The current legal position, he argued, creates an almost impossible situation for professional trustees. Even where all beneficiaries agree on an ESG mandate, trustees remain exposed because of what the law technically requires. Legislation would give them something to point to — a clear authority for the decision, not just an arguable one.

"Trustees could rightly point to legislation and say: we are making this decision in the course of the law," Langan-Newton said. "That's a lot more satisfying than navigating muddy waters."

He also raised the question of pace. Referencing recent Isle of Man legislation on data asset foundations — which passed quickly once there was political consensus around its branding and economic benefits — he suggested that momentum could build similarly on ESG reform if government and industry aligned on the opportunity.

Chris Corkish, Head of Asset Governance at IFGL, provided the investment platform reality check. Demand exists, but it remains cautious. Of the long-term savings plans IFGL has taken on in this area, roughly one in five included an ESG fund — but those funds represented only around 5% of total invested assets. "We're still at the tick-box stage," he said, "but the landscape has changed enormously in five years."

The good news: outflows from ESG mandates have been minimal, even through a period of relative underperformance. Clients with a long-term time horizon, Corkish argued, are well-placed to absorb short-term volatility — renewable energy stocks, for instance, have rebounded sharply in the past year despite the broader macro headwinds.

The Next Generation, the Global South and Trump

The panel broadened as audience questions arrived. On generational dynamics, Moorcroft was direct: demand is more likely to come from younger beneficiaries beginning to receive and control inherited wealth. "They want a purpose to the wealth. Sustainable and responsible investing is not the whole answer to that, but it's part of it." For jurisdictions like the Isle of Man, he argued, this is as much a branding question as a legal one. The next generation of wealth inheritors will choose where to structure — and jurisdictions that can credibly signal alignment with their values will compete more effectively.

A question from the floor raised the non-Western dimension: clients working across South Africa and West Africa, the questioner noted, are likely to view sustainability as a Western construct. Their version of "responsible" investing might centre on avoiding defence, tobacco and alcohol — not climate mitigation. Moorcroft's response was firm: the proposed legislative model is not prescriptive. It is opt-in. Families that want to embed values — whatever those values are — can; families that don't, won't be obliged to. "It's not about imposing any particular views," he said.

On geopolitics, the Trump-era rollback of institutional ESG commitments has changed the language if not the substance. Asset managers have shifted from "climate change" to "resilience" and "adaptation." Major houses like BlackRock and Vanguard are navigating proxy voting pressures from both sides. But the underlying toolkit, Corkish argued, is still expanding — the funds with genuine intentionality and institutional backing remain well-capitalised and operational.

First Mover Advantage — Still Available

The closing exchanges returned to the Isle of Man's near-miss. Langan-Newton's message was pointed: the Isle of Man surrendered an advantage by stepping back from the legislation when it was on the table. With a general election due in September, the moment to re-engage is now.

"My takeaway," he said, "is that the thing that really needs to change is that inherent caution — so that when the next possible innovation comes along, the jurisdiction grabs the bull by the horns and embraces being the first mover. Because I think that's the better place to be."

With Bermuda as a working model, STEP's Positive Impact Trust Law Reform initiative providing international momentum, and an Isle of Man election on the horizon, the question is not whether the law will change — but whether this jurisdiction will lead it.

Session 1 was moderated by David Bell. Panellists: Chris Moorcroft (Harbottle & Lewis), Andrew Langan-Newton (Keystone Law) and Chris Corkish (IFGL).