On September 28, 2023, the Pensions Regulator (TPR) reported that it has issued its first fine against a pension scheme for failing to publish its climate change report on time.
Under the Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations 2021, which came into force in October 2021, the trustees of certain schemes are required to publish a climate change report on a publicly available website. The reporting duty is coming into effect in stages and first applied to schemes with assets of £5bn or more.
Failure to comply with this requirement on time carries a mandatory penalty, with a minimum of £2,500. The maximum penalty is £5,000 where a trustee is an individual, or £50,000 where the trustee is a corporate body.
In this case, the report was produced on time, but was not published before the deadline due to an administrative error (but was published six days after the trustees became aware of the administrative error). TPR issued a mandatory penalty of £5,000 in May 2023. In its report, TPR highlighted that:
- It applied an amount above the minimum because it was a corporate body and to reflect the nature of the breach.
- Failure to comply with the requirement to correctly publish a climate change report on time will lead to financial penalty.
- Trustees are ultimately responsible for ensuring climate reporting requirements are met (and can't expect administrators to do this).
- Schemes that receive a penalty for non-compliance, will be named in TPR's bi-annual compliance and enforcement bulletin.
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