6 June 2018
The Environmental Audit Committee’s report as part of its enquiry into greening finance, specifically considering how pension schemes should be addressing environmental risk and the risks of climate change, has now been published.
Key conclusions and recommendations from the report:
- The Government should clarify in law that pension schemes and company directions have a duty to protect long-term value and should be considering environmental risks in light of this
- The Department of Work and Pensions (DWP) should propose a change in the law to require pension fund fiduciaries to actively seek the views of their beneficiaries when producing their SIP/ISS
- The full range of financial entities should be making climate related financial disclosures
- The Government should set a deadline that it expects all listed companies and large asset owners to report on climate related risks and opportunities in line with the TCFD recommendations on a comply or explain basis by 2022
- The Financial Reporting Council (FRC) Corporate Governance Code and UK Stewardship Code and the Financial Conduct Authority’s (FCA) listing rules should be amended to require climate-related financial disclosures
- The FCA, FRC and Pensions Regulator need to get up to speed on monitoring climate change risk management with these entities likely to be required to report under the Adaptation Reporting power of the Climate Change Act.
Forthcoming consultation by the DWP on revising the Investment Regulations is expected later this month.