Asset servicing banking group Caceis has launched two new ESG reporting tools for UK pension schemes.
The first is a carbon reporting tool to help schemes align with Task Force on Climate-Related Financial Disclosures (TFCD) requirements.
Earlier this year, the Department for Work and Pensions (DWP) published the outcome of its consultation Taking Action on Climate Risk in which it said from 1 October 2021, occupational pension schemes with more than £5bn in assets will need to track climate risks and set targets. They must also publish a TCFD report, which should be linked in their annual report and accounts by the end of 2022.
See also: – DWP’s climate risk action for pensions ‘a positive start’
Caceis’s first tool follows a consistent standard to measure a scheme’s total CO2 emissions alongside weighted average carbon intensity across their investment portfolio and includes Scope 1, Scope 2 and Scope 3 emissions in line with TCFD requirements.
“These metrics are aggregated in a report that will help pension schemes and trustees meet their regulatory obligations – and with more climate data on hand, can also help facilitate a stronger dialogue with investment managers on overall risk management, strategy and good governance,” the firm said in a statement.
“Our new carbon reporting tool is custody-agnostic, which means it’s open to any pension scheme,” added Scott Foster, product specialist at Caceis. “We’ve worked hard to ensure schemes of all shapes and sizes can access powerful data and reporting by simply sharing their holdings data, which is a first for a global custodian. It will give schemes a solid platform to better understand their portfolios ESG and climate risks, together with stronger sustainability alignment of ESG polices with their asset managers.”
See also: – How pension schemes can prepare for TCFD
The second tool uses the UN Global Compact Principles to identify human rights, labour, environment and anti-corruption breaches in pensions schemes’ portfolios. Both use Sustainalytics research to pull in information from global companies.
Pat Sharman, country managing director, UK at Caceis, said: “The lack of accessible governance solutions in the industry has been a longstanding issue for pension schemes. Following the new governance and reporting requirements introduced by the Pension Schemes Act 2021 on climate risk reporting, we wanted to help pension schemes understand and be able to report on the recommendations of the TCFD, ensuring climate change is at the heart of their pension scheme and enabling them to fulfil their duties. Although this only applies to pension schemes of £5bn or more in October this year and £1bn or more in October next year, climate change risks will impact all pension schemes, regardless of size.”