TPR blog: Why managing systemic risk is core to trusteeship

A blog, published today (Thursday) by The Pensions Regulator (TPR), calls on pension trustees to treat climate change and nature loss as core financial risks, not optional extras.

Mark Hill, Climate and Sustainability Lead at TPR, outlines how the regulator is raising expectations around investment governance and embedding systemic risk management into its regulatory approach.

He encourages trustees to:

• challenge advisers and asset managers on climate and nature-related risks
• use frameworks such as the Taskforce on Nature-related Financial Disclosures
• build ESG capability through TPR's Trustee Toolkit.

Mr Hill also highlights the government's consultation on transition plans with TPR convening an industry working group to shape practical approaches.

He writes: “At TPR, we are raising expectations around investment governance. Trustees should ensure that decisions are long-term, well-evidenced, and subject to appropriate challenge. This is not just about compliance, it is about leadership.”

Notes to editors

• Read the post: Why managing systemic risk is core to trusteeship
• The Pensions Regulator is the regulator of work-based pension schemes in the UK. Our statutory objectives are to:
  • protect members' benefits
  • reduce the risk of calls on the Pension Protection Fund
  • promote, and improve understanding of, the good administration of work-based pension schemes
  • maximise employer compliance with automatic enrolment duties
  • minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator's functions under Part 3 of the Pensions Act 2004 only)