Select committee: Work and Pensions Committee
Recommendation 9
Fourth Report - Pension stewardship and COP26
Published 30 Sep 2021
Paragraph 42
Addressed to Department for Work and Pensions
Work and Pensions Committee Pension stewardship and COP26 All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
The idea of “net zero alignment” does not have a single clear definition. Without a standardised definition, there is a risk that different pension schemes will interpret “net zero” in different ways. That will make it more difficult for savers to understand the approach their scheme is taking or to compare schemes. We recommend that the Pensions Regulator define net zero alignment.
From: Work and Pensions Committee, Fourth Report - Pension stewardship and COP26 (HC 238), paragraph 42, 30 September 2021
Government response
The government responded to the whole report on 17 December 2021 (deadline 30 November 2021).
Summary written by Accountability Index from the government's response. It is not the government's own words.The Government agrees with some recommendations (for example encouraging net zero targets and not incentivising divestment over stewardship) and does not agree with others, including a single lead Minister, a Pensions Regulator working group on net zero targets, and publishing direct investment data.
- On net zero targets, the Government "agrees with the Committee's recommendation" that schemes consider setting them, and says it "will continue to encourage pension schemes to sign up", provided targets do not undermine trustees' existing fiduciary duties.
- It "does not agree" that a single Minister should lead this work, and does not agree that the Pensions Regulator should set up a working group on net zero target guidance, citing industry collaboration and progress already made.
- On mandating that default options align with climate goals, the Government "understands the intention" but is "concerned" that this might force immediate divestment and prevent trustees engaging with companies.
- It expects to consult on UK draft Green Taxonomy criteria "in the first quarter of 2022, ahead of legislating by the end of 2022", and plans to publish a response to the call for evidence "in 2022".