TCFD reporting for DC Master Trusts

In our latest review of Task Force on Climate-related Financial Disclosures (TCFD) reporting, Clare Keeffe and Hugo Gravell provide insight into the approaches taken by commercial Defined Contribution (DC) Master Trust providers, highlighting best practice when addressing multiple stakeholders and considering ways to improve member engagement.

Since the introduction of climate change reporting requirements for certain pension schemes in 2021, commercial DC Master Trusts have arguably led the way in producing detailed reporting on their management of climate risks and opportunities.

Whether that is driven by the marketing capabilities of such a document, greater interest from younger members, or the longer time horizons of DC Master Trusts in comparison to Defined Benefit (DB) pension schemes (and therefore arguably greater exposure to climate risks), one can only speculate.

However, the reality is Master Trusts are experiencing many of the same difficulties that private sector schemes are in writing such reports, in particular:

• How can we engage members?
• How can we effectively show the progress we are making?
• How can we effectively communicate our plans for the future?

Master Trusts are also having to contend with producing TCFD reports for a variety of stakeholders; members, regulators and pressure groups.

To discover the current state of play, we have reviewed the TCFD reports of 16 providers, highlighting the common themes, what the best reports contain, and how you can improve the reporting output of your DC Master Trust.