The Department for Work and Pensions (DWP) has published a consultation, setting out proposals for larger occupational pension schemes and authorised master trusts to publish their climate risk financial disclosures.

The consultation, published 26 August 2020, recommends that trustees of large occupational pension schemes must have effective governance, strategy, risk management and accompanying metric targets, to manage climate risk and opportunities in the market from October 2021.

The DWP has recommended that trustees calculate the carbon footprint of pension schemes, and how the value of these assets and liabilities would impact temperature rises.

These proposals would be required to be made public, referenced from the schemes’ annual reports and accounts section. Additionally, DWP is proposing that trustees with £1 billion or more in assets in the following year to be included in these proposals from 2023, while this consultation will be extended to all occupational trustees from 2024.

Ralph McClelland, partner at law firm Sackers, said: “Following the industry working group report earlier in the year, the DWP has shown its continued commitment to the implementation of stricter climate related reporting for larger UK pension schemes by publishing today’s consultation. The DWP’s key proposals would mandate Task Force on Climate-related Financial Disclosures (TCFD) reporting for pension scheme trustees.

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