UK pension schemes face new climate risk reporting rules
The UK’s largest workplace pension schemes must comply with new mandatory requirements to take action on climate change under government measures that will also pile pressure on the fund management industry.
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From October, trustees of pension plans with more than £5bn in assets will have a legal duty to report on the financial risks of climate change within their portfolios.
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The government announced the measures, which will apply to schemes with more than £1bn in assets from October 2022, in a consultation response published on Wednesday.
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“Broadly speaking trustees will be required to assess in some detail what different climate change scenarios might mean for their portfolios, liabilities and, critically, their sponsors,” said Michael Bushnell, managing director of Lincoln Pensions, the pension advisers.
“Asset managers are going to have to work hard to get that information. They will need consistent scenario analysis, not just from asset managers, but also others including actuaries and covenant advisers as well.”
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