The chief investment officer of auto-enrolment scheme NEST and the chief responsible investment officer of the Church of England Pensions Board (CEPB) are among members of a newly-launched UK taskforce that will “develop the gold standard” for climate transition plans to be disclosed by listed companies and certain financial organisations.
Formally launched today by HM Treasury with a two-year mandate, the Transition Plan Taskforce will aim to establish best practice for transition plans and develop templates that would be suitable for incorporation into UK regulatory frameworks, alongside guidance on metrics and targets.
The group’s mandate is to be fulfilled by three workstreams creating:
- A sector-neutral framework for private sector transition plans;
- Sector-specific guidance for finance and real economy sectors; and
- Recommendations for companies preparing transition plans and stakeholders such as investors using them.
The Taskforce is led by a steering group, co-chaired by John Glen, economic secretary to the Treasury, and Amanda Blanc, chief executive officer of Aviva.
Mark Fawcett, CIO of fast-growing defined contribution scheme NEST, is on the steering committee alongside Sacha Sadan, ESG director at the Financial Conduct Authority (FCA), Michelle Scrimgeour, CEO of Legal & General Investment Management, corporate leaders, and others.
The steering group is supported by a delivery group of experts from across industry, academic and civil society. Members of the steering group are invited to delegate staff onto the delivery group and to participate in the day-to-day work of the Taskforce.
Adam Matthews, chief responsible investment officer of CEPB, is one of 29 members of the delivery group, which also includes Faith Ward, chair of the Institutional Investors Group on Climate Change and chief responsible investment officer of the Brunel Pension Partnership, a local authority pension pooling company. NEST’s Fawcett is also listed as participating in the delivery group.
John Glen, economic secretary to the Treasury, said the Taskforce brought together “an impressive range of forward-thinking stakeholders to ensure firms can put together plans to aid our transition to a low-carbon economy”.
The launch of the Taskforce is part of the UK’s approach to planned new Sustainability Disclosure Requirements (SDR), an economy-wide climate impact-focussed reporting regime first referred to in a speech by Chancellor Rishi Sunak in July. This was elaborated on in a ‘Greening Finance’ roadmap in October.
In November, at the UN climate change conference the Chancellor clarified the government would move to make publication of transition plans mandatory for large companies and certain financial sector firms; this is due to be the case from 2023.
The same day, the FCA published a discussion paper on SDR requirements for asset managers and FCA-regulated asset owners, and investment labels.
“We expect to draw on the Taskforce’s outputs to encourage well-governed and credible transition plans, building on existing TCFD guidance”
Sacha Sadan, ESG director at the Financial Conduct Authority
The FCA’s Sadan said the asset management regulator would work with the Transition Plan Taskforce “to promote global consistency and comparability in the disclosure of transition plans”.
“We expect to draw on the Taskforce’s outputs to encourage well-governed and credible transition plans, building on existing TCFD guidance which we have already integrated into our climate-related disclosure rules for listed companies and regulated firms.”
It is not yet clear what transition plan or new Sustainability Disclosure Requirements may come towards trust-based workplace pension schemes. The November ‘Greening Finance’ roadmap said that certain UK pension schemes “will disclose their sustainability-related risks, opportunities and impacts in a way that enables clear communication with savers”.
A spokesperson for the Department for Work and Pensions previously told IPE that specific reporting requirements, including scope, timing and detail, would be developed following public consultation.
Asset owners regulated by the FCA are life insurers providing investment products and providers of contract-based defined contribution schemes, while trust-based occupational pension schemes are regulated by The Pensions Regulator.
According to the Transition Plan Taskforce’s terms of reference “other interested financial regulators [besides the FCA] will be invited a observers”.
According to today’s announcement the Transition Plan Taskforce will work with international organisations developing standards and best practices to ensure complementarity. These include the International Sustainability Standards Board, the Glasgow Financial Alliance for Net Zero, the new net-zero scrutiny group launched by the UN Secretary General, and the International Platform on Sustainable Finance.
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