Stuart O’Brien, partner at Sackers and Chair of the Pensions Climate Risk Industry Group (PCRIG),commented: “New climate-related governance and reporting rules mean that many pension scheme trustees have a raft of new rules and disclosure requirements. Schemes in scope will need to establish and maintain clear governance frameworks and processes for identifying and managing scheme related climate risks and select and report on at least three (or from October 2022 four) climate related metrics, setting a non-binding target for at least one of them. Some schemes will have their work cut out to get ready in time.”
O’Brien continued: “The learning curve within the industry will be steep, but schemes in the £1bn to £5bn range can benefit from the work undertaken by the larger schemes who are already implementing these regulations. It’s no surprise, however, that going into our recent webinar, over a quarter of attendees (29%) were unsure of what they need to do. Nor is it a surprise that the biggest concern is identifying and collecting the required data (46%).”
O’Brien concluded: “Trustees aren’t expected to be climate experts or scientists, but they are ultimately responsible and accountable for ensuring that they comply with the new regulations. They need to start asking the relevant questions of their advisers and investment managers now to ensure they’re well placed to comply with the regulations when their scheme comes into scope. There is also industry guidance to support trustees too, including a practical step-by-step guide from PCRIG that covers all aspects of the new regulations that will help trustees better navigate their way through this.”
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