The financial risks of climate change are “too important to ignore” and the industry must play its part in tackling the issue, Pensions Minister Guy Opperman has said.

Speaking at an Association of British Insurers (ABI) conference, Opperman stated that pension and investment professionals must “do the right thing”, and take their environmental, social and governance (ESG) responsibilities seriously.

He also said that regulations introduced by the government, which require scheme trustees to clearly set out their ESG and climate change policies, “have been a game-changer and focused minds”.

Opperman told the conference: “The financial risks from climate change are too important to ignore.

“Many pension schemes are doing the right thing by tilting portfolios towards renewables or away from fossil fuels, and by engaging much more forcefully with investment firms who fail to take environmental and social issues seriously.”

He encouraged further investment in green energy and infrastructure with potential greater returns for savers, as it can help companies improve ESG standards.

He added: “Pension schemes can identify investment opportunities which will make market-beating returns for members as we move to a low-carbon economy.

“They ought to be thinking about the assets which help drive new investment in important sectors of the economy: smaller and medium firms, housing, green energy projects and other infrastructure which deliver the sustainable employment, communities and environments which all of us wish to enjoy.”

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