Trustees of larger occupational pensions and authorised schemes could soon be required to calculate and publish their schemes’ carbon footprint under new government proposals.
The Department of Work and Pensions is now consulting on draft legislation to enact its proposals to improve the governance and reporting of climate change risks and opportunities.
This consultation, which closes on March 10, is aimed at trustees and managers, pension scheme service providers and scheme members and beneficiaries as well as other interested stakeholders.
This is in response to an earlier consultation on the broader policy proposals.
These disclosures would be required to be publicly available and referenced with the schemes annual reports and accounts. Pension savers would also have to be information where they can access this information in their annual benefit statement.
This is a step up from current regulations, which require trustees to take into account “financially material’’ environmental, social and governance (ESG) factors, including climate change. They must include their investment approach to these within their annual Statement of Investment Principles.
B&CE, the provider of The People’s Pension chief investment officer Nico Aspinall says: ““Good governance is crucial to any successful occupational pension scheme so anything that assists trustees in considering the environmental impact of decisions they make is to be welcomed.
“We will carefully consider the proposals contained within this latest consultation document before responding.”
He added: “The People’s Pension is committed to tackling climate change and has actively engaged with the Department for Work and Pensions through their earlier consultation on how best to apply the TCFD recommendations to UK pension schemes.”
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