Buck launches ESG dashboard for UK pension schemes

The dashboard will also allow schemes to begin meeting the compliance requirements set out in the Pensions Schemes Act 2021

Buck, a consulting, technology, and administration services firm specialising in pensions and employee benefits, has launched an environmental, social, and governance (ESG) dashboard for UK pension schemes.

In addition to showcasing scheme-specific ESG data, the dashboard will allow schemes to begin meeting the compliance requirements set out in the Pensions Schemes Act 2021, which passed into law on 11 February 2021.

Buck’s ESG dashboard goes beyond just meeting compliance requirements. The tool is designed to enable schemes to access ESG metrics on their investment portfolio as defined and prioritised by the trustees, and to also see relevant ESG management information clearly via the dashboard.

Every trustee board and sponsor will have their own priorities within each of the “E”, “S,” and “G” requirements, and the dashboard is tailored for each board’s ESG preference and provides easy access to crucial ESG data that matters to them.

This may include greenhouse gas emission data on their investment portfolio, social and governance scores, exclusions currently in place, and proportion of investments in potentially controversial businesses, as well as Buck’s ESG ratings on each underlying investment fund.

The launch of the new tool follows the incorporation of the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) into the Pension Schemes Act 2021, containing several new ESG requirements for schemes, which will begin coming into operation this year. Schemes will need to have in place effective governance in relation to the effects of climate change by 1 October 2021, and publish information relating to the impact of these effects by 31 December 2022.

These changes initially apply only to defined benefit (DB) schemes with over GBP5 billion in assets; those with between GBP1 billion and GBP5 billion will have an extra year to comply. A review, scheduled for 2024, will consider widening the scope of the regulations to include more schemes.

Celene Lee, Principal and Senior Investment Consultant at Buck, says: ESG investing has been gathering momentum for quite some time and the regulatory changes and climate-related financial disclosures that will come into force as part of the Pension Schemes Act 2021 are going to rapidly accelerate this.

Lee says the ability to compile clear and relevant ESG management information is now an absolutely essential consideration for U.K. schemes as part of the decision-making process and it’s only going to become more relevant.