September 12, 2018 / 7:24 AM / a year ago

British pension schemes to disclose climate change strategy

Sample polymer five and ten GB pound banknotes are seen on display at the Bank of England in London September 10, 2013. The Bank of England is moving closer to ditching paper pounds and switching to plastic banknotes instead. The central bank said on Tuesday it would ask the public its opinion before taking a decision in December on whether to adopt polymer pounds which also would be smaller than current notes. REUTERS/Chris Ratcliffe/pool (BRITAIN - Tags: BUSINESS SOCIETY) - RTX13FP1

LONDON (Reuters) - British pension trustees will be required to show scheme members how they account for a range of financially material risks such as those related to climate change when investing, under new rules announced on Tuesday.

The rules, which come into force on Oct. 1, 2019, will force trustees of defined contribution schemes to produce a statement of investment principles that shows how they will consider environmental, social, governance and other similar risks in their investments, the Department for Work and Pensions said.

Schemes will also have to prepare a separate statement on how they plan to take members’ views on the principles into account, and, beginning a year later, show how they acted on the principles.

Pressure group ShareAction said the new rules would give “a new level of protection” to the millions of people automatically enrolled into company pensions in recent years and give them a chance to say which ethical investment issues matter to them.

“This is a major development, for which we have long fought, and we commend the government on this action to protect UK pension savers,” Catherine Howarth, Chief Executive at ShareAction, said.

“Working people in the UK deserve 21st century risk management of their retirement assets and investment strategies that anticipate the impacts on portfolios of issues like climate change.”

Reporting by Simon Jessop; editing by David Evans

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