Pension schemes will have to give members more information about the risk of climate change under new rules being introduced by the government.
It wants pension funds to take firmer action against climate change and has tabled an amendment to the Pension Schemes Bill to do this.
The amendments toughen mandatory disclosure rules and are the latest ratcheting up of measures to force large pension schemes to report their climate change strategies.
The Pensions Regulator updated its investment guidance for defined contribution schemes last summer that require trustees to explain how they approach risks such as climate change.
From October 2020 trustees must produce an implementation report that explains how they acted on the investment policies outlined in their statement of investment principles.
The changes to the Bill mention regulations may impose more prescribed reporting from schemes on their climate strategy.
Last week work and pensions secretary Therese Coffey and Bank of England governor Mark Carney met to talk about the work of the taskforce on climate-related financial disclosures.
They discussed pushing pension schemes further on this.
Reacting to the amendment, the Pensions and Lifetime Savings Association’s Joe Dabrowski says: “We fully support initiatives that help pension schemes with assessing climate change risks. Achieving common forms of disclosure throughout the pensions and investment industry has the potential to make a significant difference to reporting and informing decision making.”
But he warns parts of these new amendments appear to go beyond current rules for schemes to disclose what they do on climate change and would give unprecedented new powers to government bodies to interfere in private sector schemes’ investment strategies.
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