Pension Schemes Bill

While the Department does not hold data on the proportion of UK pension fund assets allocated to climate solutions, we do require pension schemes to evaluate Environmental, Social, and Governance (ESG) factors, including climate change, in their investment strategies. Specifically, trustees of larger schemes are required to assess and report on climate-related risks and opportunities, including investments in climate solutions. This reporting is done in accordance with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.

We will be considering whether to update sustainability reporting, following our review of the TCFD Regulations this year, and the outcomes to the two Government’s consultations currently underway on UK Sustainability Reporting Standards and our Transition Plans manifesto commitment. Measures outlined in these aims on improving transparency and accountability across the economy, helping investors—including pension schemes—understand how climate and nature-related issues affect their investment choices.

Measures outlined in The Pension Schemes Bill, concerning productive investment and consolidation of UK occupational workplace pension schemes, can significantly benefit social and environmental objectives by enabling larger, more efficient schemes to engage more effectively with companies on ESG issues, and to invest in a wider range of assets, including those focused on sustainability and long-term impact, such as, infrastructure, renewable energy, and other socially responsible projects.