Stuart O’Brien comments on climate risk governance and TCFD reporting changes

ESG and climate change

Stuart O’Brien, partner comments on the DWP’s consultation launching today (27 January) on new Climate Change Governance and Reporting Regulations. The consultation confirms a “significant portion” of mandatory requirements can be brought forward to 2023. These include a review on reporting requirements being extended to include all schemes, regardless of size.

Stuart O’Brien said: “The statutory guidance sets clear expectations that for defined benefit (DB) schemes, scenario analysis will need to cover not just the assets, but also sponsor covenant and the potential implications of different climate scenarios on actuarial assumptions.

This will likely be new territory for lots of schemes. Schemes with DB and defined contribution (DC) sections will need to do scenario analysis separately for their DB section and the DC default fund.”

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