Good Energy has called on The Pensions Regulator (TPR) to take more drastic action on climate change after stating that the industry is “failing to act on the crisis”.

The renewable power company urged the regulator to step up to the plate by setting strict environmental targets for investors, increasing transparency and levying fines for non-compliance.

It also recommended the creation of “a strong and widely accepted definition of what investments support the environment and cut carbon emissions”, arguing that this would “stop greenwashing”.

Good Energy made the recommendations after contacting 54 pension schemes with collective assets under management of £2.9trn with a letter which asked a series of basic questions regarding their climate change policies.

The questions included requests for information about whether schemes would achieve net zero emissions by 2050, what stewardship policies were in place and how schemes were integrating environmental, social and governance factors into investing.

The majority of those contacted did not reply, with Good Energy receiving just seven responses from funds, which managed £1.3trn in assets.

However, only four of these provided detailed responses on how the funds were addressing the climate emergency as the remaining three merely pointed Good Energy towards their website for answers, with the company claiming that this “shines a light on how the industry is failing to act on the crisis”.

Good Energy founder and CEO, Juliet Davenport, commented: “Pensions are the next frontline in the fight against climate change, but our research shows the industry hasn’t got the message. The sector continues to hide behind complex language, making it very difficult to know where your money is being invested.

“More needs to be done to address serious climate risks. We know the demand is there from the public, but this needs to be matched by people who control the money.”

In response, a TPR spokesperson said: “When the Pensions Schemes Bill becomes an Act, climate change will be written directly in to pensions law for the first time. These new proposals will raise the bar on how trustees approach climate change.

“Trustees will have to look at the management and governance of climate risks and opportunities in more detail and publicly report on their findings and plans.

“We’ve worked with other regulators and government departments on a roadmap towards consistent information on climate change right across the investment chain. The plan is to introduce this over the next five years, with most requirements to be introduced over the next three.

“It is important to note that it’s not TPR’s role to direct trustees on investment matters or direct investments.”

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