April 18. 2024

TCFD Reporting Pensions Regulator Review of 2023 Reports


The Pensions Regulator (TPR) has published its latest review of pension scheme TCFD reports. This sets out TPR’s observations, feedback and suggested improvements for a selection of 30 reports published in 2023 (10% of the published reports). Trustees are reminded to have regard to the DWP’s statutory guidance on TCFD reporting and they are expected to consider this review when preparing their reports. Importantly, the review considered whether the 30 reports took account of its equivalent review published last year. We summarise below some of the key points from the review.

1. Overarching observations

The following approaches were found to be helpful:

  • Scheme information being included at the beginning of reports.
  • References to specific investment mandates which explained the mandate’s size relative to the total scheme assets.
  • Plain English summaries aimed at members.
  • Being concise and efficient in covering disclosure requirements.
  • Some shorter/mid-length reports were better.
  • Including specifics rather than using generic wording.

2. Actions taken by trustees

Reports reviewed demonstrated a range of actions that trustees have taken. These included, for example, updating DC default lifestyle strategies so as to include sustainable funds and encouraging fund managers to engage with top carbon dioxide emitters.

3. TPR feedback on each section of the reports

The review addresses specific findings on each of the sections within the reports, covering good practice observed, issues observed and ways to improve future reports. The governance section was considered to be generally stronger in reports, while on strategy TPR observed encouraging signs of careful consideration of climate-related risks. Some examples of ways to improve future reports are:

  • Governance – demonstrate strong trustee oversight of climate change governance even where activities are delegated.
  • Strategy – trustees should form their own views on material climate-related risks and opportunities even when relying on the input of others.
  • Scenario analysis – for all types of analysis trustees should allow time to interpret the analysis and provide comments in the report on their conclusions.
  • Risk management – include enough detail, for example setting out the investment reports received by trustees.
  • Metrics – present results in a more summarised or aggregated level to help reader understanding.
  • Targets – targets should be linked to the actions trustees take.

Next steps

Trustees should ensure the review’s findings are considered when preparing their 2024 report. TPR acknowledges that schemes are not all exposed to climate change risk to the same extent, and time and resources spent should be proportionate – therefore certain "good practice" points may not be relevant or proportionate for some schemes.

How we can help trustees

Climate change reporting is a now a key compliance requirement for many schemes and it will be important to ensure that learnings are taken into account (e.g. from previous preparation of a scheme’s report and/or industry comments). We can help trustees in the preparation of their TCFD reports in all or any of the following ways:

  • Detailed legal review of TCFD reports.
  • High level legal review of TCFD reports.
  • Advising on legal matters related to TCFD compliance and/or TCFD reports.
  • Training on TCFD requirements.

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