DWP consultation response on climate and investment reporting

The Department for Work and Pensions has published its response to its Climate and investment reporting: setting expectations and empowering savers consultation.

The DWP’s response confirms that the Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations 2021 will be amended so that trustees of in-scope schemes will be required to measure and report on their scheme’s alignment with the goals of the Paris Agreement for schemes year ending from October 1, 2022.

Concerns raised about the volume, quality and availability of data and the mismatch between the in-scope timelines for trustees and asset managers, were acknowledged.

However, the DWP believes that other work-streams (such as the proposed Sustainability Disclosure Requirements) will assist in improving the available data whilst the ‘as far as they are able’ qualification should ease concerns in the interim.

Updates to the accompanying Statutory Guidance have also been published to assist trustees with implementing the new requirements. The guidance places an emphasis on trustees being clear about the methodology underlying their chosen metrics with a narrower and more prescribed choice of potential metrics open to trustees.

Alongside this, the DWP also announced that it will work with Smart Pension, Aviva and Hargreaves Lansdown to run a three-week ‘green nudge’ trial to encourage members themselves to learn more about making greener pension choices – the results will be published later this year.