Reporting on a Greener Future
By Maggie Williams
As climate change and ESG stewardship become a central part of pension schemes’ investment strategy, identifying suitable performance measures and devising frameworks to report on them has also risen in importance.
The Pensions Regulator and Department for Work and Pensions now requires schemes to use the Task Force on Climate-Related Disclosures framework (TCFD) to report on their portfolios – and from April 2022, large companies in the UK will also be subject to mandatory climate risk reporting, based on TCFD.
Although some local government schemes have already begun to report against the TCFD framework, the government is expected to release a consultation in the summer on future action.
However, the process of TCFD-related reporting can be time-consuming and complex for schemes, especially in the first instance. The output also isn’t particularly member-friendly, so schemes may need to create further reports to meet members’ as well as TPR’s needs.
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