41AClimate 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—

a

that assets are assessed by reference to their exposure to risks of a prescribed description, and

b

that an assessment includes determining the contribution of the assets of the scheme to climate change.

5

The regulations may require the trustees or managers of the scheme to take into account—

a

different ways in which the climate might change, and

b

different steps that might be taken because of climate change.

6

Regulations under subsection (5) may require the trustees or managers of the scheme to adopt prescribed assumptions as to future events, including assumptions about—

a

the steps that might be taken for the purpose of achieving the Paris Agreement goal or other climate change goal, or

b

the achievement of the Paris Agreement goal or other climate change goal.

7

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.

8

In this section “the Paris Agreement goal” means the goal of holding the increase in the average global temperature to well below 2°C above pre-industrial levels referred to in Article 2(1)(a) of the agreement done at Paris on 12 December 2015.

41BClimate 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 (which may include information about matters to which regulations under section 41A may relate).

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.

41CSections 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.