Our rapid response to the pandemic shows what’s possible as we turn our attention to the next big issue of our time – climate change, writes Chris Read
The middle of May is fast approaching and there’s a great deal of expectancy associated with further easing of lockdown flowing through the country.
I write this article in flight. Above the deep blue Mediterranean, tufts of distant clouds seem to anticipate my arrival in Malta - the land of my birth.
This place has also had a difficult time. As in the UK, lockdowns, curfews, illness and sadness have been relieved by vaccinations and societal habits changing.
It’s time to travel again. Time to meet people from other places. There has been a growing realisation that, despite our differences of language and culture, we are all bound together, united in common experience and as caretakers of the planet we live on.
Looking out of the window of the plane the thin whisp of atmosphere separates of the deep blue sea and the sky. If you have ever been to the Tate Modern, you will not have missed the giant maroon Rothko’s adorning the entrance. Like a deep blue Rothko, the sea and sky are conjoined.
As the pandemic is increasingly under control, our attention will turn towards how, as a society, we will live with Covid in our daily lives. Covid will continue to exist, like flu or typhoid, we will inoculate against it and change some of our daily habits to accommodate it. Social distancing, face coverings, travel screening are all aspects of life that we can look forward to in the future.
When I return to the UK a little later this month, I will do so from an Amber country. I will jump through the restrictive and testing hoops that are in play. Colour coding countries will be announced - randomized like a lottery. You’ll just have to hope that the country of your choice is not pronounced Red. To add to tighter security screening in travel accepted today, Covid safety-linked inconvenience to travel will also become the norm.
In the summertime...
In any event, there is much to look forward to, we have the summer ahead of us. In store is uncertainty, as is always the case with a British summer. There will be some long lazy days of sunshine, interspersed with wet and windy ones. The British preoccupation with talking about the weather is understandable. It’s so changeable that it’s worthy of a few words of conversation. In other parts of the world of course, the weather is front and centre of concern.
With the pandemic easing, climate change is today’s big challenge for policy makers and companies alike. Unlike Covid, there is no vaccine for the societal and economic challenges presented by climate change.
In April, The Pensions Regulator (TPR) laid out its climate strategy on how to help trustees meet the challenges of climate change. Together with the Government’s net zero carbon target for 2050, the pensions industry, as well as all other parts of the financial services value chain, have a role to play in helping us all to meet these targets.
In July 2019, the government released its Green Finance Strategy policy paper. This paper aims to align financial flows with clean, environmentally sustainable and resilient growth. In turn, TPR has aligned its climate strategy with a ‘green framework’ for achieving net zero. The framework is defined with three time periods: the immediate, mid-term and long-term future.
The immediate future is the time between now and 2024, or climate change strategy Sprint #1. This period will encourage pensions schemes to disclose and refine their policies on climate change. Since the beginning of the year, listed companies have been asked to make more detailed disclosures about how climate change affects their business, consistent with the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD). As new legislation comes into force, the UK will become the first country to make TCFD-aligned reporting fully mandatory across the economy by 2025.
The mid-term, between 2025 and 2035, will see TPR mandate that all pension schemes integrate climate change considerations into decision-making and take action as a result. TPR will also establish ambitious schemes to help market participants to meet net zero targets.
The long term, between 2036 and 2050, is a little vaguer on specifics but the intention is clear. TPR will be an important contributor as part of the global economy operating on a low-carbon basis and supporting the UK’s vital 2050 net zero target. In this period, climate change considerations will become part of business-as-usual across the economy.
In my company, as a service provider to the industry, we too will introduce a climate change policy into our business strategies. I suspect these policies will focus on technology infrastructure, facilities management, interactions with our people and with our clients, as well as the inevitable changes we will drive in new working practices post-lockdown. If Mark Rothko were alive today, maybe his latest collection of paintings would be massive green affairs - conjoined with hope.
Chris Read is group CEO at Dunstan Thomas
