Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what steps her Department is taking to ensure pension funds consider the impact of climate change when taking investment decisions.

The Government recognises that climate change is a defining national and international emergency, and we have introduced three key measures to ensure that pension schemes understand their responsibilities in responding to it.

Firstly, since January 2019 those running single employer occupational pension schemes have been required to establish an effective system of governance including consideration of environmental, social and governance factors related to investment assets in investment decisions.

Secondly, also since January 2019 schemes with 100 or more members must carry out and document a risk assessment of their system of governance including risks relating to climate change, the use of resources and the environment and risks relating to the depreciation of assets as a result of regulatory change (known as transition risk).

Thirdly, as of 1st October, trustees of occupational pension schemes must state their policy on how they take account of the financial risks of climate change when developing their investment strategies. Defined contribution pension schemes are also required to publish their policy online.

As the Minister for Pensions and Financial Inclusion I have spoken extensively about the new requirements and made clear this Government’s expectations of pension schemes.