Investment Perspectives
TCFD - supporting clients in understanding and reporting on climate change risk
01 Jul 2021
With the government having just published its consultation response alongside the final TCFD regulations and statutory guidance for pension funds, this article explores some of the analysis that can be carried out to support TCFD reporting requirements.
Topics discussed include:
- Climate metrics
- Investment strategy and targets
- Scenario analysis
Climate change is a material financial risk which should be considered by all pension schemes. The TCFD framework will become compulsory for larger pension schemes from October this year.
Regardless of whether a scheme falls into scope or not, the framework provides a comprehensive means of integrating climate risk into all stages of investment decision-making.
Climate metrics and scenario modelling are a helpful way of understanding risk exposures and the potential impact that climate risk factors can have on pension funds. As such, it is worth considering what analytics can be most effective in helping your scheme understand climate risk, identify key areas of focus, as well as meeting regulatory requirements.
If you have any questions please get in touch.
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