Climate governance requirements for schemes of at least £1bn

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Earlier this year, we reported that the Pension Schemes Act 2021 introduced regulations requiring schemes with assets of at least £5bn and all authorised master trusts and collective DC schemes, to adopt governance requirements and report in line with recommendations made by the Taskforce on Climate-related Financial Disclosures (TFCD). Compliance is required by 1 October 2021.

Schemes with assets of at least £1bn must comply by 1 October 2022 and the government has stated that it will review whether smaller schemes should comply in 2024. Under the regulations, trustees will have to work out the scheme’s carbon footprint by calculating the greenhouse gas emissions of their investments. They will have to set out climate-related targets and disclose their findings and details of their governance arrangements.

The government is now pushing ahead with the legislation and has published draft statutory guidance on the new requirements.

Read our full article on The Pensions Regulator’s Climate Change Strategy here.

Adam Simons

Senior Consultant

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