Pension trustees must treat climate change and nature loss as “core financial risks” not optional extras, according to The Pensions Regulator.
TPR said it was raising expectations around investment governance on these issues, with the regulator embedding systemic risk management into its regulatory approach.
In a blog TPR’s climate and sustainability lead Mark Hill said he wanted to see a more proactive approach from trustees, with them challenging advisers and assets managers on climate and nature-related risks. He also called for trustees to make wider use of new frameworks, such as the Taskforce on Nature-related Financial Disclosures, while building ESG capability through TPR’s trustee toolkit.
Hill said: “Trustees should ensure that decisions are long-term, well-evidenced, and subject to appropriate challenge. This is not just about compliance, it is about leadership.”
He also highlighted that the government was consulting on transition plans, with TPR convening an industry working group to shape practical approaches to this issue.
