TPR’s annual survey of DC schemes (PDF, 922KB, 42 pages) shows that while the number of DC schemes whose trustees are considering climate change in their investment strategies has doubled since 2019, it still stands at just 43%.
The annual survey found that of those schemes whose trustees had not considered climate change in their investment strategies, 19% were planning to review this, while a concerning 21% felt climate change was not relevant to their scheme.
The pre-COVID survey was carried out across 200 single-employer and multi-employer group schemes and 16 master trusts between January and March 2020 before the first national COVID-19 lockdown.
David Fairs, TPR’s Executive Director of Regulatory Policy, Analysis and Advice, said: “Our survey shows trustees of DC schemes must give greater attention to the risks and opportunities facing their schemes from climate change.
“The Pension Schemes Bill – which we expect will become law very soon – will see requirements for the effective governance of climate change risks and opportunities written explicitly into pensions law in the most comprehensive way to date.
“Trustees already need to consider climate change as part of their statement of investment principles but the new Act will significantly increase the expectations placed upon them.
“Although a phased approach means the new Act won’t affect all DC schemes to start with, it will increase the expectations savers have of those responsible for their pension pots when it comes to climate change.
“Climate change risks will threaten pension savings right across the industry. This means trustees should build their capacity in this area now, so they can understand what climate change will mean for their scheme and so be better placed to make decisions contributing towards good outcomes for savers.”
In the spring we will, for the first time, publish a strategy setting out how TPR will help trustees meet challenges around climate change.
|
