The Pensions Regulator has published a helpful blog on TCFD climate reporting.
In particular, the Regulator acknowledges the challenges faced by Trustees in relation to:
- Data (availability, quality, consistency);
- Scenarios (identification and selection); and
- Disclosure (striking the balance between the level of disclosure required to meet the Regulations and statutory guidance, while keeping the disclosure accessible and useful to readers).
Against the background of these challenges, it is useful that the Regulator says that it does not anticipate it will be necessary to issue any penalty notices other than where the report has not been published (mandatory penalty of at least £2,500) and where it is clear that the trustees have not made a genuine effort to comply (discretionary penalty of up to £50,000).
The blog can be accessed here.
We think it is positive that the Regulator anticipates taking a 'collaborative approach" in relation to climate reporting, which for many schemes represents a significant amount of work, particularly in the first year. We are happy to help trustees understand the requirements and their legal obligations. Please contact Kate Granville Smith with any queries
"Ultimately, we believe the disclosure requirements should be seen not only as an exercise in compliance but as an exercise in risk (and opportunity) management, which should lead to improved outcomes for scheme members." TPR blog 10 June 2022