Smaller pension schemes will face difficulties in meeting new regulations on climate change and may need additional help to meet these challenges according to the Association of Professional Pension Trustees (APPT).
The body has called for the government and The Pensions Regulator to provider greater clarification around expectations for schemes with assets below £1bn.
The APPT says that new requirements around scheme data will make the reporting process difficult for trustees. It has requested further guidance and examples from TPR on minimum standards. This it says will help schemes understand where TPR draws the line between the ‘materiality of data’ and the additional costs of obtaining it, before data is widely available.
The APPT also suggests that future guidance for small schemes should be sensitive to the cost of implementation and to expectations around annual review of targets. These are areas where additional education ad training is needed and the APPT proposes that climate risk management should be a new module for the TPR toolkit.
These comments came in a response to the TPR’s recent consultation on its ‘Guidance on governance and reporting of climate-related risks and opportunities’.
APPT council member Vassos Vassou says: “As these new requirements come into play, trustee knowledge and understanding will need to evolve and develop to ensure that they are implemented in the correct way and trustees feel comfortable complying with the changes.
“We need to see a unifying expectation for smaller schemes. One that enables trustees to move forward with climate-aware investment strategies with confidence, rather than being too cumbersome for the resource available.”