Explanatory note

These Regulations make amendments and modifications to the Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations 2021 (S.I. 2021/839) (“the Principal Regulations”). The Regulations also make transitional provision.

Regulation 2(2) amends Part 1 of the Schedule to the Principal Regulations (climate change governance etc. requirements) to introduce a requirement that trustees must select and calculate a portfolio alignment metric for the assets of their scheme.

A portfolio alignment metric is a metric which gives the alignment of the scheme’s assets with the goal of limiting the increase in the global average temperature to 1.5 degrees Celsius above pre-industrial levels.

Regulation 2(3) amends paragraph 27(n) in Part 2 of the Schedule to the Principal Regulations (metrics information to be included in a report under regulation 6), to require that trustees include specified information about their portfolio alignment metric in the report they are required to produce and publish under regulation 6 of those Regulations.

Regulation 3 makes modifications to Part 1 of the Schedule to the Principal Regulations, for the purposes of amendments made to those Regulations by regulation 2 of this instrument, for trustees who were subject to the requirements in Part 1 of the Schedule to the Principal Regulations before the date on which this instrument comes into force and who have not ceased to be subject to the requirements before that date.

Regulation 4 makes modifications to Part 1 of the Schedule to the Principal Regulations, for the purposes of amendments made to those Regulations by regulation 2 of this instrument, for trustees who were subject to the requirements in Part 1 of the Schedule to the Principal Regulations before the date on which this instrument comes into force but who cease to be subject to the requirements before that date, where such trustees subsequently become subject to those requirements by virtue of regulation 3(4), 4(4) or 5(4) of the Principal Regulations.

Regulation 5 makes transitional provision. It provides that the amendment made by regulation 2(3) of this instrument does not apply in respect of a scheme year which ends before 1st October 2022 as trustees are not required to calculate a portfolio alignment metric in scheme years ending before that date.

A full impact assessment has not been produced for this instrument as no, or no significant, impact on the private, voluntary or public sectors is foreseen.