Taking action on climate risk: improving governance and reporting by occupational pension schemes

Consultation opened on 26 August 2020. Closing date 07 October 2020 at 17:00.

Summary

This consultation seeks views on policy proposals to require trustees of larger occupational pension schemes and authorised schemes to address climate change risks and opportunities through effective governance and risk management measures.

Consultation description

The author for this consultation is the Department for Work and Pensions. As such, all consultation information and related documents can be found on the GOV.uk website.

This consultation seeks views on policy proposals to require trustees of larger occupational pension schemes and authorised schemes to have effective governance, strategy, risk management and accompanying metrics and targets for the assessment and management of climate risks and opportunities. It also invites responses on proposals to disclose these in line with the recommendations of the international industry-led Task Force on Climate-related Financial Disclosures (TCFD).

It is proposed that among the activities required would be calculating the ‘carbon footprint’ of pension schemes and assessing how the value of the schemes’ assets or liabilities would be affected by different temperature rise scenarios, including the ambitions on limiting the global average temperature rise set out in the Paris Agreement. The disclosures would be required to be made publicly available, referenced from the schemes’ Annual reports and Accounts, and pension savers informed of the availability of the information via their annual benefit statement.

The consultation is aimed at –

  • pension scheme trustees and managers;
  • pension scheme members and beneficiaries;
  • pension scheme service providers, other industry bodies and professionals;
  • civil society organisations;
  • any other interested parties.

In general, Northern Ireland’s pensions policy and legislation operate in line with Great Britain, and there is, in effect, a single pensions system across the UK. It is anticipated therefore that any changes will be introduced here, subject to the necessary Ministerial, Executive and Assembly approvals.

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