Trustees are “failing in their duty” if they do not take “serious action” to address climate-related financial risks, Pensions Minister Guy Opperman has warned.

In response to being asked at a PLSA Investment Conference panel session what actions he would like to see trustees do to become more engaged with climate-related financial risks, Opperman stated: “If you are a trustee and you are not taking serious action now, you are frankly failing in your duty. You do not need a ‘parent’ - the government - to tell you this.

“There is a serious issue, which is how do we engage investment consultants and asset managers, because a trustee may wish to do things at this present stage, but is not actually able to drive this forward because the asset manager and investment consultant are not providing the sufficiency of information.”

He added that understanding what a ‘good’, Paris-aligned portfolio looks like is the most important thing the government and industry needs to do.

Opperman admitted that what this looks like can be difficult, as there are lots of different efforts occurring to define this, potentially adding confusion, “but in reality it is not as difficult as everybody seeks to maintain”.

An audience poll at the panel session found 58 per cent considered a lack of consistent good quality disclosures from managers as the the biggest barrier to implementing TCFD in pension schemes, followed by a lack of capability or knowledge, at 20 per cent. A lack of scale or resources was the biggest barrier for 12 per cent, followed by a lack of interest or awareness for 10 per cent.

Sixty-six per cent stated good disclosures from investment managers was required to implement good TCFD disclosures, followed by 25 per cent wanting better advice on climate risk from consultants, and 9 per cent desiring more support or engagement from sponsors.

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