Pensions Regulator to be flexible with first wave of TCFD reports

The Regulator has confirmed that it will take a flexible approach when it comes to review the first wave of mandatory reports on climate change risks.

A Regulator spokesman gave this reassurance in a speech at a recent conference of the Pensions and Lifetime Savings Association (PLSA).

This is consistent with previous messaging from the Regulator, recognising that undertaking governance and reporting in line with the Taskforce for Climate-related Financial Disclosures (TCFD) is a new area for pension schemes and their advisers. There may also be an issue, at least initially, with the availability and quality of data.

Trustees that fail to produce a report will receive a mandatory fine but the Regulator spokesman highlighted that penalties for reports which fell short of the full requirements were discretionary. The Regulator plans to look at “the bigger picture” rather than focussing on technicalities.

This will no doubt be welcomed by the largest occupational pension schemes and master trusts which are having to grapple with the new requirements first. However, the Regulator has also put down a marker that it will expect standards to improve over time.