The impact of climate change on pension schemes is getting more attention than ever before, with regulations under the Pension Schemes Act 2021 due to come into force in October.

We believe that if trustees do not adequately consider climate-related risks and opportunities, or exercise effective stewardship, pension scheme investment performance and funding may suffer, which could mean savers missing out.

Evidence from our surveys suggests the majority of schemes are not yet paying enough attention to these risks and opportunities. This month we launched an eight-week consultation on guidance designed to help trustees meet the new standards.

We urge trustees and their advisers to take this opportunity to shape our guidance. The consultation also seeks views on TPR’s approach to imposing penalties for non-compliance with the regulations.

Where trustees, who are subject to the new requirements, fail to publish a climate change report on a publicly available website, accessible free of charge, within the required timeframe, TPR must issue a mandatory penalty of at least £2,500.

Rather than focus on the fines, I would like trustees to understand that a landscape of resilient pension schemes that protect savings from climate-related risks is entirely within reach and they have a role in shaping the industry debate to help deliver that. Details of the consultation can be found on TPR’s website.

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