The upcoming Pension Schemes Bill will require U.K. trustees to make climate-related portfolio disclosures, said Guy Opperman, minister for pensions and financial inclusion.
The bill is set to take effect by the end of July. U.K. trustees will have to make climate-related portfolio disclosures in line with recommendations and guidelines set out by the Taskforce on Climate-related Financial Disclosures.
Speaking at the Pensions and Lifetime Savings Association's annual investment conference held in Edinburgh on Thursday, Mr. Opperman the requirement is a recent amendment to the bill.
"There is no reason not to know how to implement the TCFD standards," Mr. Opperman said. "Climate change is a material risk" and should be considered as part of plan governance and risk management.
Mr. Opperman also wants to force retirement plan executives to report on how their portfolios are aligned with the goals of the 2015 Paris Agreement on climate change.
"The Pensions Regulator should take it seriously when there is a poor disclosure," he said. In the short-term, where portfolio companies do not provide the necessary information for plans' own disclosure, exceptions will be made, he added.
Plan executives should be searching for verifiable answers to climate-related questions that are "not green-washed" from money managers. "If you don't get (answers), you should move on," he said.
Mr. Opperman also called for plans to consider how they could enroll self-employed workers into retirement arrangements. The government is looking at how this growing cohort of workers — which now accounts for 15% of the U.K. workforce — could be included under the U.K.'s auto-enrollment program, Mr. Opperman said.
Also Thursday the Pensions Climate Risk Industry Group launched draft guidance to help trustees to assess, manage and report climate-related risks. The group is made up of plan executives and money managers, and was set up by the Pensions Regulator and the U.K. Department for Work and Pensions.
The group is seeking feedback until May 7 on the guidance, which was compiled to help trustees meet upcoming legal obligations under the new bill. Disclosures are expected to begin by 2022.
