Following recent investigations into pension scheme investments, the Parliamentary Environmental Audit Committee (EAC) has made recommendations for factoring in environmental risks to financial decisions. The report proposes that the inclusion will make investors more aware of climate risk exposure.

Guidance on these environmental risks, including climate change, has been called for the by the EAC. While The Pensions Regulator has provided aid for trust-based pension schemes, the FCA has yet to produce the same for contract-based pension schemes. A joint-response by the Government and the FCA concerning the Law Commission’s recommendations will be released next month, revealing whether or not the FCA intends to follow the recommendations.

The clarification of pension fund trustees’ fiduciary duties has also been requested by the committee. After years of lobbying for this disclosure, UKSIF supports the EAC’s mandates and is looking forward to the law additions.

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