Moved by
Baroness Stedman-Scott
73: After Clause 123, insert the following new Clause—
“Climate change risk
(1) The Pensions Act 1995 is amended as follows.
(2) After section 41 insert—
“41A Climate change risk
(1) Regulations may impose requirements on the trustees or managers of an occupational pension scheme of a prescribed description with a view to securing that there is effective governance of the scheme with respect to the effects of climate change.
(2) The effects of climate change in relation to which provision may be made under subsection (1) include, in particular—
(a) risks arising from steps taken because of climate change (whether by governments or otherwise), and
(b) opportunities relating to climate change.
(3) The requirements which may be imposed by the regulations include, in particular, requirements about—
(a) reviewing the exposure of the scheme to risks of a prescribed description;
(b) assessing the assets of the scheme in a prescribed manner;
(c) determining, reviewing and (if necessary) revising a strategy for managing the scheme’s exposure to risks of a prescribed description;
(d) determining, reviewing and (if necessary) revising targets relating to the scheme’s exposure to risks of a prescribed description;
(e) measuring performance against such targets;
(f) preparing documents containing information of a prescribed description.
(4) Regulations under subsection (3)(b) may, in particular, require assets to be assessed by reference to their exposure to risks of a prescribed description and may, for the purposes of such an assessment, require the contribution of such assets to climate change to be determined.
(5) In complying with requirements imposed by the regulations, a trustee or manager must have regard to guidance prepared from time to time by the Secretary of State.
41B Climate change risk: publication of information
(1) Regulations may require the trustees or managers of an occupational pension scheme of a prescribed description to publish information of a prescribed description relating to the effects of climate change on the scheme.
(2) Regulations under subsection (1) may, among other things—
(a) require the trustees or managers to publish a document of a prescribed description;
(b) require information or a document to be made available free of charge;
(c) require information or a document to be provided in a form that is or by means that are prescribed or of a prescribed description.
(3) In complying with requirements imposed by the regulations, a trustee or manager must have regard to guidance prepared from time to time by the Secretary of State.
41C Sections 41A and 41B: compliance
(1) Regulations may make provision with a view to ensuring compliance with a provision of regulations under section 41A or 41B.
(2) The regulations may in particular—
(a) provide for the Authority to issue a notice (a “compliance notice”) to a person with a view to ensuring the person’s compliance with a provision of regulations under section 41A or 41B;
(b) provide for the Authority to issue a notice (a “third party compliance notice”) to a person with a view to ensuring another person’s compliance with a provision of regulations under section 41A or 41B;
(c) provide for the Authority to issue a notice (a “penalty notice”) imposing a penalty on a person where the Authority are of the opinion that the person—
(i) has failed to comply with a compliance notice or third party compliance notice, or
(ii) has contravened a provision of regulations under section 41A or 41B;
(d) provide for the making of a reference to the First-tier Tribunal or Upper Tribunal in respect of the issue of a penalty notice or the amount of a penalty;
(e) confer other functions on the Authority.
(3) The regulations may make provision for determining the amount, or the maximum amount, of a penalty in respect of a failure or contravention.
(4) But the amount of a penalty imposed under the regulations in respect of a failure or contravention must not exceed—
(a) £5,000, in the case of an individual, and
(b) £50,000, in any other case.”
(3) In section 116 (breach of regulations), in subsection (3)(b), after “10” insert “or under provision contained in regulations made by virtue of section 41C ”.
(4) In section 175 (Parliamentary control of orders and regulations)—
(a) in subsection (1), after “(2)” insert “, (2A)”;
(b) after subsection (2) insert—
“(2A) A statutory instrument which contains the first regulations made by virtue of section 41A or 41C must not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.””
Member’s explanatory statement
This amendment imposes requirements on trustees and managers of certain occupational pension schemes as regards taking into account the effects of climate change and publishing information relating to those effects.