The Chair of the cross-party Environmental Audit Committee has written to the top 25 pension funds in the UK to ask how they manage the risks that climate change poses to pension savings. It follows an admission from the Department for Work and Pensions that there is widespread misunderstanding amongst trustees on the scope of their fiduciary duty in relation to environmental risks.
Commenting on this move, Luke Hildyard, Policy Lead for Stewardship and Corporate Governance, at the Pensions and Lifetime Savings Association, said:
“Numerous credible commentators from institutions such as the Bank of England, Cambridge University and many leading financial services firms have highlighted the major economic impact of climate change and the serious long-term threat that it poses to pension funds' investments. It's definitely an issue that trustees should be making time to discuss and seeking advice on.”
The PLSA issued guidance on the topic, recommending that our members should:
- Incorporate climate change expertise onto trustee boards and other governance bodies
- Review how current and prospective asset managers consider climate change as part of their investment decisions, and incorporating this into manager selection processes
- Instruct asset managers to engage with investee companies with regard to their plans to mitigate and adapt to climate change
- Report on their management of climate change-related risk to beneficiaries, using the reporting framework recommended by the Financial Stability Board’s Task Force on Climate Related Financial Disclosures (TCFD)
NOTES TO EDITORS
Lee Blackwell, Head of Media and PR, Pensions and Lifetime Savings Association
T: 020 7601 1726, M: 07713 073023, E: [email protected]
Kathryn Mortimer, Press Officer, Pensions and Lifetime Savings Association
T: 020 7601 1748, M: 07901 007713, E: [email protected]
Eleanor Carric, PR Manager, Pensions and Lifetime Savings Association
T: 020 7601 1718, M: 07825 171 446, E: [email protected]
ABOUT THE PENSIONS AND LIFETIME SAVINGS ASSOCIATION
We’re the Pensions and Lifetime Savings Association; the national association with a ninety year history of helping pension professionals run better pension schemes. Our members include over 1,300 pension schemes with 20 million members and £1 trillion in assets, and over 400 businesses. They make us the voice for pensions and lifetime savings in Westminster, Whitehall and Brussels.
Our purpose is simple: to help everyone to achieve a better income in retirement. We work to get more money into retirement savings, to get more value out of those savings and to build the confidence and understanding of savers.