CACEIS has launched a custody agnostic, carbon metrics reporting tool that will provide pension schemes with a platform to align themselves with the Task Force on Climate-Related Financial Disclosures (TFCD) reporting requirements.
From October this year, pension schemes with over £5 billion assets under management must report on the financial risks of climate change within their portfolios in line with TCFD recommendations.
Pension schemes over £1 billion have to meet the same requirements in October next year.
CACEIS is the first custodian in the UK to launch a reporting tool of its kind.
The new carbon metrics reporting tool will allow pension schemes to independently visualise their portfolios carbon footprint and meet the metrics as well as targets requirements they must start to collect and report on as a part of the TCFD.
The tool will help pension schemes measure and report on their total carbon footprint, alongside weighted average carbon intensity, across their investment portfolio.
The report will include coverage on scope 1, scope 2 and scope 3 emissions in line with requirements.
CACEIS has also recently launched a reporting solution based on the UN Global Compact Principles.
The custody agnostic tool identifies environmental, social, and corporate governance (ESG) risks and breaches within a pension scheme’s investment portfolio.
Pension schemes can access their carbon data and ESG risks through CACEIS’ online dashboard.
Both solutions leverage Sustainalytics, an independent provider of sustainability research ratings.
A recent ESG survey by CACEIS in conjunction with the Pensions and Lifetime Savings Association revealed that 52 per cent of UK schemes place a heavy reliance on their asset managers for helping set and maintain their ESG policies.
On climate risks, it showed that around 63 per cent of respondents mentioned that they lack the information to translate such risks into their investments.
This comes as no surprise because the missing piece of the puzzle is data showing how such risks apply to their portfolio with 74 per cent of schemes said they lacked this vital intelligence.
Following the new governance and reporting requirements introduced by the Pension Schemes Act 2021 on climate risk reporting, Pat Sharman, country managing director, UK, CACEIS comments: “We wanted to help pension schemes understand and be able to report on the recommendations of the Task Force on TFCD, ensuring climate change is at the heart of their pension scheme and enabling them to fulfil their duties.”
“Although this only applies to pension schemes of £5 billion or more in October this year and £1 billion or more in October next year, climate change risks will impact all pension schemes, regardless of size,” Sharman adds.
