Simon Jones, head of responsible investment at Hymans Robertson comments on today’s House of Lords climate risk disclosure amendment:

“Today’s proposed amendment to the Pensions Bill in the House of Lords which would significantly increase the climate risk disclosure requirements for pension scheme, will come as a surprise to many in the pensions industry as it pre-empts guidance which is expected to be released shortly. The proposal comes after an announcement last week that the government would bring forward the ban on sales of new petrol, diesel and hybrid cars and is a further indication that the government is not afraid to drive positive action on climate change through policy change.  We suspect this is the beginning of a raft of policy responses which will be needed to tackle the climate crisis.

“Pension schemes will need time to understand the new reporting requirements and take steps to adapt their strategies, reporting and governance so that they comply.  We are concerned about introducing more onerous disclosure requirements which may not deliver any real change in trustee behaviour and risks becoming another box-ticking exercise.

“We urge the pensions industry as a whole to take meaningful action to reduce climate risk.  This will not only deliver better outcomes for pension scheme members but will have knock on benefits for the UK as a whole on our journey to carbon neutral.”