Climate Risk and TCFD
As addressing the climate crisis gains further traction, managing climate risk will become a top priority for trustees. While the implications of ESG factors on investment decisions have received lots of focus, trustees and sponsors must also look more holistically at climate risks, including considering it in covenant assessments and actuarial valuations.
The UK government is the first in the world to make climate risk reporting a statutory requirement. While this only catches the largest pension schemes at the moment, it is expected to be extended to pension schemes of all sizes by 2023.
In this paper, we set out some “quick win” actions to put climate risk on the agenda and provide some detail on the TCFD (Task Force for Climate-related Financial Disclosures) regulations.