Many TCFD and implementation reports are seen as “box-ticking exercises”
The government should announce a moratorium on taskforce on climate-related financial disclosures (TCFD) and implementation statements for pension schemes in a bid to unlock capital for the climate transition and investment in private markets, a leading professional trustee urges.
In a column for Professional Pensions today (26 September), Bobby Riddaway – the managing director of HS Trustees and the founder chair of the Trustee Sustainability Working Group (TSWG) – said that, despite a regulatory push, many TCFD and implementation reports were seen as "box-ticking exercises".
He said some schemes spent as much as £500,000 annually on these disclosures – adding that implementation reports, especially for schemes under £100m, were often "generic and consume a disproportionate share of consulting budgets".
Riddaway said this diverted resources from more impactful climate initiatives – leaving "little room for proactive climate strategy".
He said: "The industry's sustainability advocates — trustees, consultants and asset managers — are often stuck in a reporting loop, rather than educating or innovating."
Riddaway argued the key to unlocking pension capital for the climate transition lay in refocusing the efforts of sustainability experts.
He said: "We could unlock their potential now with a moratorium on TCFD and implementation statements for pension schemes."
Riddaway said such a moratorium would free up expert time for educating trustees and consultants, developing structured finance models and building confidence in private asset classes.
He stated such a move would also signal government intent to prioritise action over compliance as well as encouraging collaboration between schemes, government bodies and institutions like the British Business Bank and National Wealth Fund.
Riddaway said the government could then observe how successful the industry is at the above before deciding on its long-term requirements – requirements he thought might include replacing TCFD with transition plans and simplifying implementation statements for small schemes.
He said: "This approach would empower sustainability experts to focus on solutions, not just disclosures, and foster a culture of proactive investment across the industry."
Riddaway concluded: "We are at a pivotal moment. If HM Treasury embraces the proposals outlined here — particularly the moratorium on reporting — we could see a short-term surge in UK investment and lay the groundwork for long-term growth in private markets."
