From 1 October 2022, trustees of larger occupational pension schemes and authorised master trusts in the UK will be required to measure and report on an additional climate change metric as part of their Task Force on Climate-related Financial Disclosures (TCFD) governance and disclosure obligations.
The new metric will measure the extent to which schemes’ investments are aligned with the Paris Agreement goal of pursuing efforts to limit the global average temperature increase to 1.5°C above pre-industrial levels.
The requirement will apply to all schemes in scope from 1 October 2022. It will therefore apply immediately to schemes with £1 billion or more in assets when the climate change requirements first apply to them from 1 October (as well as applying to schemes with £5 billion or more in assets and authorised master trusts from that date).
Trustees will now need to get up to speed quickly with these new requirements, as well as watching this space for further developments in this rapidly evolving area.
For more information, see our client alert.