Pension Schemes Bill
Updated: Jun 1, 2020
Pension assets in the UK total $2.9 trillion (102% of UK GDP), underling the critical role they need to play in ensuring the UK meets its climate commitments — and the very significant risks to savers if climate risks associated with pension scheme investments are not addressed.
In a recent speech to the UN Business secretary Alok Sharma said, “we will need all finance to align with the Paris Agreement.” He specifically referenced pension funds and this, of course, echoes similar remarks by Mark Carney and work undertaken by the Environmental Audit Committee in its Greening Finance report.
Despite this, there were no provisions addressing climate risks when the Pensions Schemes Bill was published on 7 January 2020. Peers for the Plant has therefore worked to tackle this omission via debates, amendments and discussion with the Government, building cross-party consensus and working with Aviva, ShareAction and UK Sustainable Investment & Finance.
We are delighted that, in response to this and wider sector advocacy, the Government has now introduced amendments that will make provision for a regulatory regime on climate risk disclosures and has provided some assurances on a number of other points of detail that we raised.
P4P has identified further improvements that could be made to the Bill to better align pension schemes' reporting with the objectives of the Paris Agreement and ensure the public has information, and therefore choice, on where their money is invested. We remain in conversation with the Government and are now developing a strategy for the final stage of the Bill in the Lords.
The progress achieved on this Bill demonstrates the opportunity to put a climate lens over ‘non-climate’ Bills, and build support and action on the floor of the House from Peers across the political spectrum, further supported by sector experts, in this case pensions experts and 'first mover' businesses who are taking a responsible lead on green finance.
Read Committee Stage contributions from Baroness Hayman (Crossbench), Baroness Jones of Whitchurch (Labour), Baroness Altmann (Conservative) and Baroness Bennett of Manor Castle (Green) here:
Read more on our action on the Bill here: