Defined benefit (DB) pension scheme trustees must not forego their climate and net-zero responsibilities when moving towards the final stages of their endgame journey, Hymans Robertson has warned.

With DB schemes reaching their endgame well ahead of the UK’s net-zero target of 2050 and climate continuing to be viewed as a longer-term issue, the consultancy said it "may seem natural" to ignore the need to act.

However, Hymans stressed that focusing on downside risks, particularly from factors such as climate change, is vital to maintaining flexibility and choice, and should increase as the DB scheme nears the end of the journey.

They also claimed that building net zero into endgame can help differentiate DB schemes in a crowded insurance marketplace, as strategies are more aligned with insurer goals, and costs can be reduced.

For DB schemes considering run-on, embedding net-zero ambitions into the investment strategy discussion will help trustees future-proof their schemes, Hymans added.

Commenting on the need for net zero to remain a central element of the endgame journey, Hymans investment associate consultant, Tom Prince, said: “The current pensions landscape - with many more DB schemes thinking about their endgame journey - provides an opportunity to ensure that climate risks are fully considered.

"A 2050 net-zero goal may feel arbitrary for a DB scheme hoping to transfer its assets long before this. However, putting an ambition in place obliges trustees to consider how they can apply it to their own unique circumstances.

“Climate change increases uncertainty for investors, particularly at a time when policy responses are becoming fragmented. Considering what could happen over the course of the endgame journey and understanding how climate risks could manifest means that plans can be put in place.

"As trustees work to reduce risk within their investment arrangements, adopting a mindset where climate is an integral consideration in decision making, rather than a secondary issue, will help ensure that the sensible actions are taken.”

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