The Work and Pensions Committee has launched an inquiry into the Government’s approach to ensuring pension schemes consider the risks to funds posed by climate change and the role schemes can play in meeting emission reduction targets.
Following a consultation at the start of the year, the Government is due to bring in regulations for pension schemes on managing climate risk ahead of the UK hosting the COP26 climate conference in Glasgow in November.
The Committee’s inquiry is examining the Government’s approach to pension scheme stewardship, how it compares to approaches taken internationally, and how funds can be supported to make climate-conscious investment decisions.
Stephen Timms MP, Chair of the Work and Pensions Committee, commented on the announcement: “The UK’s commitment to cutting emissions to net zero by 2050 will have far-reaching consequences for all sectors of the economy as they adapt to the need to decarbonise.
“Pension schemes will undoubtedly want to consider the impact climate change and the measures to cut emissions will have on their portfolios.
“Unless they are wise to the risks and the need to adapt investments, there will be a knock-on effect on people’s pension pots.
“Our inquiry will be examining how the Government can inform and be informed by international practice emerging from COP26 and how they ensure schemes consider the risks to pension funds posed by climate change and provide help for them to support emerging technology through greener investments.”
The Committee would like to hear views from organisations and individuals on the following questions:
- How should pension schemes contribute to setting COP26 targets and helping to achieve the targets once agreed?
- What role should international standards have in supporting pension schemes to assess climate change risks when considering scheme investments?
- Are there suitable financial products to enable pension funds to make climate-conscious investments? How should such investment be facilitated and supported?
- How should the UK seek to share and learn from international best practice?
- What regulatory changes or other government action has been most effective in delivering change in the UK; and what changes on the part of Governments elsewhere should the UK learn from?
- Do pension schemes have suitable information to assess climate risk, or do there need to be international reforms to financial reporting?
Feedback can be submitted as part of this review until Friday 18th of June 2021.
More information about this inquiry and how to take part is available on the UK Parliament website.
