A Sustainable Investment in Journalism

A sustainable business requires diverse revenue streams. ESG Investor now operates a subscription service as of Tuesday 14th May. To find out more please get in touch with our subscription team on subscriptions@esginvestor.net

UK Pension Schemes Not Using TCFD to Drive Climate Strategy

A new white paper analysing the Task Force on Climate-related Financial Disclosure (TCFD) reports of UK pension schemes noted that the majority of assessed funds are not yet using the framework to inform and drive their climate investment strategy. Pensions for Purpose, which works with pension funds and asset managers to steer more capital toward impact investment projects, said this is due to limitations in data and the infancy of TCFD reporting (compulsory for large pension funds since October 2021), with some funds viewing these reports as “a compliance obligation”. “Climate risk is an investment risk in the portfolio – that’s why the regulations were put in place – to get pension funds to use the TCFD framework to uncover what level of climate risks they are exposed to and set targets to reduce these,” said Anastasia Guha, Global Head of Sustainable Investment at investment consultancy Redington, which sponsored the report. She said, while it may be easy to “fall into a compliance mindset”, asset owners should not allow TCFD to become “an expensive box-ticking exercise”. The white paper added that 75% of assessed funds use investment consultants to interpret data for TCFD reports, with the remainder asking their asset managers or the data source providers for the data. The existential threat of climate change has further raised questions about fiduciary duty, Pensions for Purpose added. Funds were split between advocating for risk-adjusted returns and considering the long-term impact on the world. “More government guidance for TCFD reporting on climate risk, as part of their investment risk assessment, would help trustees balance the pursuit of risk-adjusted returns with climate responsibility,” said Karen Shackleton, Pension for Purpose’s Chair and Founder. 


The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

Copyright © 2024 ESG Investor Ltd. Company No. 12893343. ESG Investor Ltd, Fox Court, 14 Grays Inn Road, London, WC1X 8HN

To Top