The Pensions and Lifetime Savings Association (PLSA) comments on the ‘Aligning your pension scheme with the Taskforce on Climate-Related Financial Disclosures recommendations’ guidance published today.
Joe Dabrowski, Deputy Director for Policy, PLSA, said: “Climate change is a systemic issue affecting nearly every industry and nearly every firm, and a priority policy focus for the PLSA in 2021.
“The TCFD guidance published today provides a very helpful framework for pension trustees to evaluate climate risk in their portfolios. We are pleased the government has listened to our concerns with respect to the frequency with which trustees should conduct their scenario testing. This strikes the right balance between encouraging trustees to understand, report and address the risks in their portfolios, without making the requirements too burdensome.
“The best endeavours approach to disclosure also recognises that climate risk management is a fast developing science with the quality of metrics improving all the time; in such an environment it is sensible to encourage trustees to disclose and address the risks they can, rather than wait for data to be ‘perfect’. Among the recommendations in its 2020 report, ‘A Changing Climate: How Pension Funds Can Invest for the Future,’ the PLSA has called for a joint industry and government review to seek to resolve this issue by addressing the competing data standards and definitions that exist.
“The PLSA is committed to supporting schemes to implement best practice on all environmental, social and governance (ESG) matters and has been involved in a number of initiatives to support improved understanding and disclosure in the pensions industry, including producing practical guidance on ESG and Stewardship, Voting Guidelines and identifying solutions to some of the barriers to wider adoption of climate-aware investing.”
NOTES TO EDITORS
The PLSA has a library of practical support for our members on climate change and ESG issues, including guidance on trustee duties, help on incorporating ESG into their scheme's investments and guidance and templates for Implementation Statements.
Click here to read more.
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