Pensions
(asked on 5th June 2019) - View Source
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what steps the Government is taking to encourage the pension industry to (a) divest pension funds from carbon-intensive industries and fossil fuels and (b) adopt the recommendations of The Task Force on Climate-related Financial Disclosures in their reporting structures.
The Governments wants to support trustees in making responsible investment decisions. However, it does not seek to direct pension schemes to invest or divest in any particular way.
We recognise that climate change is a key national and international issue and we have made sure that pension schemes understand their role responding to its effects. In September 2018, following extensive consultation with the pensions industry, this Government laid regulations to clarify that trustees should be taking account of the financial risks of climate change when developing their investment strategies. The regulations come into force from October this year. The FCA are consulting on corresponding provisions for workplace personal pension schemes. As the Minister for Pensions and Financial Inclusion I have spoken extensively about the new requirements and the Government expectations of pension schemes, including at the Westminster Hall debate regarding Pension Funds: Financial and Ethical Investments on the 22 May 2019:
“For too long there has been a perception by too many trustees -I am happy to clarify this as a Government Minister- that the environmental practices of the firms they invest in are purely ethical concerns, which they do not need to worry about: that is utterly wrong. Aside from the ethical considerations, there are real financial risks resulting from climate change. With the long-term horizons of pension investing, trustees must now consider that when they set out their investment strategies. Trustees who do not consider those matters will be breaching their statutory and potentially their fiduciary duties not only to current but future members.”
The full debate can be viewed here: