The government has today (12 March) confirmed plans to launch a consultation on Climate-related Financial Disclosures in early summer 2020.

Speaking at the PLSA Investment Conference, Pensions Minister, Guy Opperman, stated that the consultation would collect views on the implementation of potential new disclosure requirements, with a “phased approach” expected.

The consultation would follow an amendment to the Pension Schemes Bill, tabled by Opperman, which would see pension schemes have to comply with Task Force on Climate-related Financial Disclosures (TCFD) recommendations.

The Pension Schemes Bill is currently working through the House of Commons, with Opperman estimating that the bill could become law by the end of the Summer term, in mid June to July.

The consultation is therefore expected to be launched in early Summer, though Opperman stated that “on this issue [he is] unquestionably in a hurry”, stating that there is "no reason" not to know how to implement TCFD.

Opperman stated: “I have put forward an amendment to the pension schemes bill, clearly we started with ESG…but I took the view that we needed to go further, and we sat down with Mark Carney and we decided TCFD was the way ahead.

“I intend initially to use these powers to mandate public disclosure in line with the recommendations to the TCFD.

He continued: "When the bill has completed its passage through both houses, I intend to launch a consultation in early Summer on which schemes should carry out TCFD, how and when.

"I do anticipate a phased approach, starting with the larger schemes, and I expect easements early on when data is not available."

"But I do not anticipate this taking long, and on this issue I am unquestionably in a hurry."

Opperman added that there would be “swift and decisive action” from The Pensions Regulator against schemes who show "weak governance" or "poor disclosure".

He added: "“If you are in the pensions and saving business, you start with a fundamental principle that you believe saving should be done for the longer term, if you aren’t addressing climate change then there is no longer term.

“It is the defining issue of the 21st Century…It is probably the largest risk. We have limited time and there is much that schemes of all sizes can and should be doing now. ”

Whilst Opperman emphasised that schemes should be taking action now, he added that trustees shouldn’t panic, highlighting the tools available to help trustees navigate TCFD, such as the TCFD quick guide.

The Pensions Climate Risk Industry Group (PCRIG) today also launched a consultation on new guidance for the trustees of occupational pension schemes on assessing, managing and reporting climate-related risks.

Commenting on the launch of the guide, Opperman added “I am committed to ensuring all pension scheme trustees do everything they can to act to limit the risk climate change poses to their members’ future retirement income.

“TCFD is the most widely-adopted way in which organisations are managing and reporting climate risk, and I want to ensure all trustees have the help they need to align their schemes with its recommendations. That is why I welcome this guidance and the subsequent consultation.”

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