UK government releases outcome of consultation on aligning occupational pension scheme reporting with Paris Agreement

The UK Department for Work & Pensions (DWP) has released the outcome of a consultation which had collected views from stakeholders regarding draft policies that could require trustees of occupational pension schemes to report on the extent to which their investment practices aligned with the Paris Agreement goal (under the 1.5°C scenario). The consultation was launched in October 2021 and views were sought over an 11-week period. In the context of reporting and Taskforce on Climate-Related Financial Disclosures (TCFD), the DWP's response states that "whilst we acknowledge that it is not an entirely optimal outcome for trustees to be required to report against alignment metrics before asset managers in scope of the FCA’s [Financial Conduct Authority’s] TCFD regime are required to report them, we do not believe this is a strong enough reason for delay. We consider the argument that pension schemes will need to rely wholly on their fund managers for the data to calculate a portfolio alignment metric to be flawed".