### Governance
### Management of climate-related risks and opportunities – roles and responsibilities
The Trustee does not delegate any decision-making responsibility and as such, full responsibility for climate related decisions remains with the Trustee. This extends to Scheme governance activities in relation to climate change: no other party undertakes climate-related Scheme governance activities.
In March 2022, the Trustee considered a Climate Governance Policy (formally the "Trustee Policy on Governance of Climate Change Risks and Opportunities"). The Policy was updated and agreed in July 2022 to account for the formation of a TCFD subgroup (more details below). The Policy clearly lays out the division of responsibilities between different parties in order to maintain appropriate oversight of the climate-related risks and opportunities relevant to the Scheme. This ensures the Trustee can be confident that its statutory and fiduciary obligations are being met.
### The role of the Trustee Chair
It is the Trustee Chair's responsibility, with support from the Trustee Secretary, to ensure that sufficient time is allocated for consideration and discussion of climate matters by the Trustee and its advisers.
### The role of the Trustee
A summary of the Trustee's responsibilities are to:
- ensure it has sufficient knowledge and understanding of climate change to fulfil their statutory and fiduciary obligations, and are keeping this knowledge and understanding up to date;
- put effective climate governance arrangements in place and use those arrangements to help identify, assess and manage climate-related risks and opportunities for the Scheme;
- incorporate climate-related considerations into strategic decisions relating to the Scheme's investment and funding arrangements;
- ensure that the Scheme's actuarial, investment, covenant and legal advisers have clearly defined responsibilities in respect of climate change, that they have adequate expertise and resources, including time and staff, to carry these out, that they are taking adequate steps to identify and assess any climate-related risks and opportunities which are relevant to the matters on which they are advising, and that they are adequately prioritising climate-related risks; and
- communicating with Scheme members and other stakeholders on climate change where appropriate, including public reporting in accordance with The Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations 2021, The Occupational and Personal Pension Schemes (Disclosure of Information) Regulations 2013 (together "TCFD reporting").
The Trustee, with help from the TCFD subgroup, identifies, assesses and manages climate related risks. The Trustee delegates some of the heavy lifting in relation to the consideration of climate related items to the TCFD subgroup to ensure sufficient attention is given to certain matters. A summary of any work done by the TCFD subgroup is presented to the Trustee.
### The Role of the TCFD subgroup
The TCFD subgroup's role is to support the Trustee in consideration of certain climate-related matters. This ensures such matters are given sufficient attention. In particular, the TCFD subgroup ensures sufficient time is spent on:
- allowing for climate considerations when assessing and monitoring the strength of the Scheme's sponsor covenant;
- incorporating climate-related considerations into the Scheme's risk management framework and investment beliefs; and
- putting effective climate-related governance arrangements in place.
This is not an exhaustive list and the TCFD subgroup may be asked to spend time on other matters on an ad-hoc basis. Any work carried out by the TCFD subgroup will be presented to the Trustee and may be used to assist in decision making. However, full responsibility for such decisions is retained by the Trustee.
### Ensuring adequate oversight of climate-related risks and opportunities
Ensuring appropriate adviser arrangements
The Trustee seeks input from its investment, actuarial, covenant and legal advisers to ensure that it can identify, assess and manage climate risks and opportunities. The responsibilities expected of each adviser are clearly set out in the Trustee's Climate Governance Policy, which has been shared with each adviser. Details of the advisers' specific responsibilities are included in Appendix 1.
### Monitoring the Scheme's advisers
From time to time, the Trustee will review the climate competency of its advisers and take appropriate action if any concerns are raised.
Whenever reviewing agreements with external advisers, or appointing new advisers, the Trustee will consider and document the extent to which the advisers have suitable climate credentials.
With appropriate advisers in place, the Trustee ensures that climate-related risks and opportunities are considered as part of any relevant advice such as investment strategy reviews, the actuarial valuation process and assessment of the employer's covenant, with climate change included in the agenda items for each of these at the relevant meetings.
The Trustee also ensures that the TCFD subgroup has sufficient experience in considering climate risk, to ensure that the risks are suitability considered, documented, reviewed and kept up to date. This is achieved via additional training to this group as required.
The Trustee satisfies itself that its advisers take adequate steps to identify and assess climate-related risks and opportunities (which are relevant to the matters on which they are advising) by ensuring that their advisers:
- have clearly defined responsibilities in respect of climate change – having reviewed and agreed their responsibilities in the Climate Governance Policy;
- have documented their responsibilities in relevant agreements, such as the investment consultant's strategic objectives;
- have adequate expertise and resources, including time and staff, to carry these out; and
- are adequately prioritising climate-related risk.
Over 2022, the Trustee and TCFD subgroup have undertaken significant activity on climate change, based on information provided to them by their advisers and investment managers. Where appropriate, the Trustee has questioned the information provided to them to ensure they have a clear understanding of the risks facing their Scheme and the actions being taken to reduce these.