The government’s priority should be legislating for large corporations to disclose transition plans, not adding additional reporting requirements on pension schemes, according to Torsten Bell, the UK’s minister for pensions.
Bell made the remarks at the UK Sustainable Investment and Finance Association’s ownership day conference, which also featured asset owners discussing ongoing net zero developments in areas such as stewardship and reporting frameworks.
“When it comes to extra reporting requirements, the bigger priority in the shorter term is on larger companies, to which many pension schemes will have exposure,” says Bell.
“The biggest thing that would make an actual difference is bigger disclosures to asset managers and to pension schemes, from the firms they invested in,” he continues.
Regulations passed in 2022 extended TCFD-aligned reporting to large companies. Regulators have also begun consulting on mandatory transition plan disclosures and guidance, linked to sustainability disclosure reforms. The UK’s finalised Sustainability Reporting Standards, closely aligned to the ISSB/TCFD framework, were published last week, and also lay out groundwork for transition planning by large corporates.
Bell’s speech also included, in his terms, some “Reform bashing”. He criticised the party’s policies, in which Bell described Reform’s critical approach to net zero as “batshit” in light of oil and gas prices spiking following the ongoing war in Iran.
The pensions minister was also critical of recent comments made by Richard Tice, deputy leader of Reform, in which he called for the assets of local government pension schemes to be transformed into a sovereign wealth fund.
Bell said: “The wider issue is it obviously isn’t a sovereign wealth fund, because one of the features of the sovereign wealth fund is that it doesn’t have a lot of assets with liabilities. Saudi Arabia is not sitting on a large sovereign wealth fund that is all committed to paying such liabilities.
“What’s going on is that a lot of Reform led councils have told voters that it was going to be really easy to save money and would now like the LGPS funds available.”
The plan to consolidate LGPS to six schemes was also confirmed by Bell as an ongoing process that the UK government remained committed to as part of the Pension Schemes Bill, which is currently at the report stage before the House of Lords.
Also speaking at the UKSIF event was Michael Ambery, retirement saving director at Standard Life, where he downplayed the recent wave of US asset managers pulling back on ESG commitments such as a mass exodus from the Net Zero Asset Managers initiative.
Ambery noted that ESG conscious asset owners could work with such managers in “very much the same way”, and that the changes were “essentially small tweaks.”
