If the government does not “get behind” the sustainability transition, then progress simply won’t happen, Trustee Sustainability Working Group (TSWG) founder and chair, Bobby Riddaway, has argued.

Speaking at the Pensions Age Northern Conference, Riddaway emphasised the crucial role the government must play in encouraging pension schemes to take action on sustainability.

“If the government gets behind the transition, then pension schemes have enough assets to make a difference,” he said.

“If pension schemes connect, they can pool their assets together, so schemes of any size can get involved.”

Riddaway said the pension industry is entering a period of “almost unrivalled legislation”, which he said could “push climate off the agenda”.

“It's going to get pushed off by dashboards, effective system of governance, own risk assessments, covenant reviews, the new Defined Benefit (DB) Funding Code,” he continued.

“There’s so much else that trustees and schemes have to deal with - when are they going to find time to look at climate change? Especially when, I think, most trustees and consultants don’t believe pensions can make a big difference.”

Riddaway explained that many of the current sustainability solutions in the industry were built with larger schemes in mind.

“Most of the solutions were designed for big schemes to start taking climate change seriously - not for small schemes,” he noted.

“Trying to produce an implementation record for a small scheme might cost £2,000 or £3,000 and say absolutely nothing. It’s a waste of time.”

He went on to explain that one of the TSWG’s top priorities is replacing the Task Force on Climate-related Financial Disclosures (TCFD) framework with more efficient and actionable transition plans.

The government announced recently that it is considering whether to update the current rules surrounding pension schemes' sustainability reporting, confirming that it will review the 2021 Climate Change Reporting Regulations this year as part of this process.

“If there’s a commitment that TCFD in its current form will be gone, and what replaces it takes just 10-15 per cent of the time TCFD did, the industry will have actual, actionable and measurable actions,” he said.

“Moving the effort from reporting to action is the big goal this year."

To support this ambition, the TSWG will run a sustainability workshop in September or October, designed “by trustees, for trustees", with an expected attendance of up to 200 participants.

Additionally, Riddaway said the group plans to publish a series of case studies and guidance to highlight practical steps pension schemes can take, even those with less than £10m in assets.

“There are still a lot of elephants in the room when it comes to sustainability,” said Riddaway.

“If all pension schemes in the UK decided they wanted to make a difference and invest in climate solutions, the assets don’t exist, and the opportunities don’t exist. We need a lot of scaling up.”

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