Climate change and your pension

Pension schemes invest huge amounts of money in companies across the world, and it’s important that they do so responsibly. That’s where TCFD reporting comes in.

Why do pension schemes do TCFD reports?

TCFD stands for Task Force on Climate-related Financial Disclosures. The Pensions Schemes Act 2021 made it a rule that trustees of pension schemes with over £1 billion in assets must review and publish information about climate-related risks and opportunities. These TCFD reports look at areas such as governance frameworks, risk management, and metrics and targets – for example a scheme’s carbon footprint or its greenhouse gas emissions.

Investment risks and opportunities

Climate change poses various risks to the investments held by pension schemes, which could cause them to drop in value. These risks might be physical (like damage from extreme weather), financial, or systemic. A TCFD report helps trustees find, understand, and manage these risks to protect the money that will pay for members’ benefits.

Pension schemes also have the opportunity make significant investment in things like renewable energy, green technology, and sustainable infrastructure. TCFD reports encourage pension schemes to think about how they can take advantage of these opportunities while helping to build a greener economy.

The Trustee regularly reviews its investments to ensure that the options available to members – both lifestyle and self-select – reflect climate-related considerations. Self-select members of the DC Section have the option to invest their savings in the PSPS Impact Equity fund, which specifically invests in primarily in a range of global equities that seek to improve access to, and the quality of, basic life essentials, reduce inequality and mitigate the effects of climate change.

Member expectations

A TCFD report shows members, The Pensions Regulator, and others how trustees are managing climate-related risks and opportunities. Increasingly, members care about how their pensions affect the environment. The TCFD report lets schemes show they are listening to these concerns and including environmental, social, and governance (ESG) factors in their investment plans.

We’ve recently published the Scheme’s TCFD Report for 2025. Why have a look and see how your pension is contributing to the fight against climate change?