- Pensions Regulator says more on ESG and climate change reporting
- Pensions Regulator authorises the Royal Mail CDC scheme
Pensions Regulator says more on ESG and climate change reporting
In a blog published on 14 April 2023, Nicola Parish, Executive Director of Frontline Regulation at the Pensions Regulator, announced that the Regulator is placing extra emphasis on trustees’ compliance with their ESG and climate change reporting duties.
As well as a reminder of its campaign to improve ESG and climate change reporting announced in February (see Pensions Bulletin 2023/08), the blog is used to provide action points for trustees following the Regulator’s review of the first wave of TCFD reports (see Pensions Bulletin 2023/13). These include the following in relation to those within scope of producing such reports:
- From October 2022 have regard to the updated DWP statutory guidance and report on a new portfolio alignment metric and, where reporting for the second time, consider scope 3 emissions
- Improve reports taking into account increasing industry experience and data and analytical techniques, and external stakeholder scrutiny (including that arising from the Regulator’s review)
- Improve both the narratives applied to the climate change scenarios, and the outcomes these scenarios produce
- Instil ambition in scheme-specific targets where they are lacking
In addition, the Regulator asks schemes to consider developing a climate action plan setting out what actions (if any) trustees expect to take and when. The Regulator wants to see trustees and their advisers continue to take part in the developing debate around not only climate scenario and climate stress analysis, but also nature and wider sustainability reporting.
Finally, the Regulator says that it hopes that trustees, including those of smaller schemes not currently in scope of climate-reporting regulations, will find its review useful in improving their management of climate-related risk and opportunities.
Comment
This is a helpful blog linking together various strands of the Regulator’s current work on the ESG area and providing trustees and their advisers with some actions they can follow, as well as encouraging further debate to develop industry practice.
Pensions Regulator authorises the Royal Mail CDC scheme
The Pensions Regulator has announced that the first scheme to be authorised under the Pension Schemes Act 2021 as a collective money purchase scheme is the Royal Mail Collective Pension Plan.
The Regulator has been open to authorisation requests since 1 August 2022 (see Pensions Bulletin 2022/30) and unsurprisingly, given that the provisions in the Act were very much designed with the Royal Mail scheme in mind, this has proved to be the first scheme to pass the Regulator’s scrutiny.
Comment
We wholeheartedly agree with the Regulator and the Pensions Minister’s welcome of this “landmark moment”, paving the way to provide savers with new retirement options to meet their needs. We look forward to more schemes being authorised in the future, especially those with further innovations enabled by the DWP’s proposals set out in its January consultation (see Pensions Bulletin 2023/04).
