New requirements introduced in the Occupational Pension Scheme (OPS) Regulations 2021 require pension trustees to take steps to identify, assess and manage climate-related risks and report on what actions they have taken.

They will have to calculate and report on a portfolio alignment metric, which gives an indication of the scheme’s assets with the climate change goal set out in Paris Agreement, which aims to strengthen the global response to the threat of climate change.

Its goal is to limit global warming to 1.5°c above pre-industrial levels and reach net zero by 2050.

David Fairs, TPR’s executive director of regulatory policy, said: ‘Climate change and the transition to net zero has the potential to cause material financial consequences for pensions schemes and, ultimately, savers’ retirements.

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