The Pensions and Lifetime Savings Association (PLSA) comments on the Government’s The Pensions Regulator’s (TPR) Task Force on Climate-Related Financial Disclosures (TCFD) guidance consultation.
Joe Dabrowski, Deputy Director Policy, PLSA, says: “The PLSA welcomes TPR’s draft guidance, which marks an important step in setting expectations for schemes that will shortly be required to produce TCFD aligned disclosures. Overall, we believe that the draft guidance strikes the right balance between encouraging ambitious governance standards and acknowledging the many challenges schemes face.
“As the sector adjusts to the new expectations, we encourage TPR to ensure that focus is on working with trustees to improve standards and not on issuing fines and enforcement action unnecessarily. To that note, we support the common sense approach TPR has taken with its mandatory and discretional monetary penalties policy. It should give trustees reassurance that enforcement action will be undertaken sensibly and will take into account the gaps in data available to investors and the rapidly evolving regulatory environment.
“Before finalising the guidance there are several areas which would however benefit from further refinement or development – in particular, further clarification of reporting expectations across different asset classes – where data availability may be highly varied – guidance on use of qualitative scenario analysis, the impact of climate issues on covenant risk, and also ensuring that all elements of the information sought and the format in which it can be received can be used purposefully and understood by regulators and scheme members alike. We look forward to working with TPR to address these areas as quickly as possible.”
