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TCFD governance and reporting – reporting and disclosure

This article is part of a series on new duties for UK pension scheme trustees to assess, manage and report on climate change risk. To read the rest of the series click here.

A note on timing

These requirements apply to trustees of the UK’s largest occupational pension schemes (with more than £5 billion in assets) and master trusts from 1 October 2021; other schemes with more than £1 billion in assets will fall within scope a year later.

Specific valuation and timing rules apply to determine whether/when a scheme will be in scope of these requirements. Please contact an Allen & Overy adviser if you need more information on this.

The reporting and disclosure requirements within the new TCFD governance and reporting regulations will be a challenge for trustees, with approaches likely to evolve over time.

Even for trustees in the first wave, there is slightly longer to prepare for this aspect of the new requirements, as the report must be published seven months after the end of the first scheme year in which the requirements apply – so, for example, for a large scheme with a year end of 31 December 2021, the deadline will be 31 July 2022.

However, it’s important that the structures and processes that are put in place now are designed to provide a solid foundation for reporting in due course. Here we look at the key requirements and how to plan for them.

What are the new duties?

A TCFD report must be published within seven months of the scheme year end date for any year in which a scheme is required to comply, setting out the following content:

Governance & strategy

Trustees must describe:

  • how they maintain oversight of CRRO
  • the role of persons who undertake/assist trustees with governance activities in identifying, assessing and managing these CRRO and how the trustees satisfy themselves that this is being done adequately; and
  • the CRRO identified by the trustees as relevant to the scheme over the short, medium and long term (and the time periods identified), and the impact of these CRRO on the scheme’s investment and (for DB) funding strategy.

Scenario analysis


  • the most recent scenarios analysed;
  • the potential impact on scheme assets and liabilities in those scenarios (and explain any gaps); and
  • the resilience of scheme assets, liabilities and investment strategy (and, for DB, funding strategy) to climate-related risks in at least two climate-related scenarios.

Where no new analysis has been undertaken, give the reasons why not.

Risk management

Describe the processes for identifying, assessing and managing CRR and how these are integrated within overall risk management.

Metrics and targets


  • the metrics the scheme has calculated and, if data does not cover all scheme assets, explain any gaps in data; and
  • the target(s) selected and the scheme’s performance as measured against these.

Trustees must publish their TCFD report (on a public, freely-accessible website and linked from the scheme’s annual report) and inform members of the availability of their most recent report via the annual benefit statement and (DB) annual funding statement. They will also be required to report compliance via the scheme return.

Understanding the new duties

The reporting and disclosure duties are intended to help achieve transparency towards members, the Pensions Regulator (TPR) and the industry, and to ensure that in-scope schemes are ‘thorough and rigorous’ in their approach to addressing climate-related risks and opportunities. Trustees are required to have regard to the statutory guidance on the regulations; if they choose to diverge from it in their approach to the new duties, they should explain their reasons for doing so in the TCFD report.

TPR has stated that it ‘will be looking for clear evidence’ that trustees are taking account of climate change in making scheme decisions. As noted previously, if the disclosures made in the TCFD report suggest that trustees have insufficient knowledge and understanding, TPR might consider taking action. TPR.has also indicated that it will take some types of reporting breach more seriously than others – for example, a failure to disclose particular information (making it more difficult for a member to understand the impact of climate change for their pension savings) would be more serious than a technical failure to describe a particular role.

The guidance goes into considerable detail about what is expected in terms of the content of the TCFD report and the types of information trustees should set out for each section (governance, strategy and risk management; scenario analysis; metrics and targets – see the list in the Further resources box below). It also reminds trustees that the report should provide members with the opportunity to engage with their scheme’s climate-related risks and opportunities. The report should be written in a way that will ‘allow a reasonably engaged and informed member to be able to interpret and understand trustees’ disclosures, and raise concerns or queries where appropriate’. To that end, it should include a plain English summary as well as more detailed information.

The guidance also sets out expectations around the presentation of the link to the TCFD report in the scheme’s annual report – it should have its own sub-titled section with an easy-to-retype hyperlink and (at least) a short summary explaining what the link will take readers to. Trustees may wish to provide a short summary of their findings. The webpage used for disclosure should be searchable and the report downloadable.

Getting started

Although the reporting duty may seem less pressing due to its later deadline, it’s important for trustees to plan ahead for the data that will be required to make the disclosures they aim to achieve. Trustees may need to request data from different internal and external sources, and need to know in advance whether and when that data will be available (and how complete it will be).

It’s also important to remember that, in addition to the discrete duties in relation to scenario analysis and metrics and targets, there are ongoing duties throughout the year in terms of governance and risk management. When writing the scheme’s TCFD report, trustees will need to have good records of what decisions were made, when and why – for example, what conclusions they reached about the risks facing the scheme and about appropriate mitigations; how they selected particular scenarios and metrics, and how they sought to fill data gaps.

The Pensions Climate Risk Industry Group has published guidance on ‘Aligning your Pension Scheme with the TCFD Recommendations’. As already highlighted in notes 3 and 4, this guidance includes useful case studies and example reporting for some aspects of the duties, and is due to be updated to reflect the regulations.

Further resources: