TCFD reporting and governance requirements
02 Feb 2021
The DWP has published its response to the consultation on mandatory TCFD reporting for pension schemes and also published draft regulations for consultation over the period to 10 March 2021. The DWP has also published the updated guidance from the Pensions Climate Risk Industry Group (“PCRIG”) alongside this, including a competency framework for investment consultants.
As a reminder, below is a snapshop of the the key messages set out in the proposals:
- TCFD is a framework for managing and reporting climate-related risks and opportunities;
- The Government is consulting on draft regulations for mandatory TCFD reporting and compliance with climate governance requirements for pension schemes with assets of £1bn or more;
- Master Trusts and Collective Defined Contribution schemes also fall within the scope of the proposals. Consideration is also expected to be given to the requirements for LGPS funds by the Ministry of Housing, Communities and Local Government (“MHCLG”);
- Governance requirements would commence on 1 October 2021 for schemes with at least £5bn of assets and on 1 October 2022 for schemes with at least £1bn of assets;
- Schemes will be required to submit their first TCFD report within seven months of their scheme year ending after 1 October 2021 (2022 for £1-5bn schemes) but no later than 31 December 2022 (2023);
- The proposals address requirements for scenario analyses and use of metrics and targets.
- Pension schemes will need to publish their TCFD reports online.