TPR issues further guidance for trustees on climate change requirements

What you need to know

• Last year saw the introduction of new climate-related governance and reporting requirements for certain schemes, including larger occupational pension schemes.
• The Department for Work and Pensions (DWP) published statutory guidance which trustees must have regard to when complying with the new requirements. The Pensions Regulator (TPR) has published complementary guidance which sets out what trustees need to do and report on in their annual climate change report (known as a TCFD report).
• In February 2022, TPR published an illustrative example showing how trustees of a fictitious scheme might approach meeting the new requirements. Although the case study is detailed, TPR emphasises that it is not intended to be used as a checklist by trustees.
• The guidance shows how much trustees (of schemes in scope) will have to do in order to comply with the new duties. It also indicates how climate-related risks and opportunities need to be central to the thinking of these trustees in many areas going forward, including investment, governance and risk management.