The Pensions Regulator has issued its first ‘green’ fine — after trustees of ExxonMobil pension plan failed to published a mandatory report on how the scheme was managing the risks of climate change.
A £5,000 fine was levied after the scheme failed to publish its Taskforce on Climate-Related Financial Disclosures (TCFD) report on time. The scheme’s trustees stated that the report had been produced, but had not been published due to an administrative error.
Schemes with more than £1bn of assets under management are now required publish a climate change report, and ensure this is publicly available, so savers can see trustees are making decisions which take into account climate risks and opportunities.
These rules came into effect last October, with schemes of £5bn-plus being subject to these rules a year earlier.
To monitor compliance, TPR investigated the publication of all climate change reports — a total of 80 in the first year. After being unable to locate the Exxon Pension Plan report online, TPR contacted the scheme trustees. The report was published six days later.
The matter was resolved in July 2023 when Exxon paid the penalty, which was issued in May 2023.
TPR said it had made this information public to remind remind trustees about these new regulations, designed to improve pension scheme governance and the reporting of climate-related risks and opportunities.
It comes as TPR publishes its latest compliance and enforcement bulletin, for the first half of 2023. Schemes including Exxon, which receive a penalty for failing to publish their climate change report, will now be named in the bulletin.
TPR’s executive director for frontline regulation, Nicola Parish, says: “In our role to protect savers, we take climate change requirements extremely seriously. Our case against the ExxonMobil Pension Plan shows we will and must act by using the mandatory fining regime set out in law.
“This will continue as we analyse the second phase of climate change reporting, when smaller schemes will be required to report.
“The case serves as a warning to trustees about the importance of having proper governance and oversight where third parties are carrying out tasks on their behalf.”
