For trustees, the rise of environmental, social and governance factors within the pensions sector has resulted in a shift in agendas, with compliance and regulatory matters growing in prominence.

Fifty-three per cent of trustee boards now consider ESG an important agenda item, according to research produced by the Pensions Management Institute and BMO Global Asset Management in 2021.

This is up markedly from 2020, when ESG was important for just 29 per cent of trustee boards.

With current regulatory shifts and changes to disclosure standards driving up the importance of ESG matters, trustees are now thinking in earnest about what ESG disclosures will look like in the future.

Turning up the volume
The trend of climate-related reporting across the FTSE 100 over the past few years illustrates a potential trajectory for the scale of ESG disclosures being made.

Between 2015 and 2020, disclosures quadrupled, according to Diana Rose, head of ESG research at Insig AI.

“Climate disclosure will keep increasing in the UK over the next five years, driven by the Task Force on Climate-related Financial Disclosures becoming mandatory from April 6 2022 for large companies,” she says.

“I’d expect to see a big increase compared with 2020 in TCFD-related disclosures in the 2022-23 reporting cycle, but by no means a peak.”

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