Obligations to consider climate risk in relation to the investments of the British Steel Pension Scheme/New British Steel Pension Scheme

The document argues that climate change represents a material financial risk that pension trustees must consider to fulfill their legal duty to act in the best interests of members. It highlights the vulnerability of fossil fuel assets, the potential for low-carbon investment returns, and emerging market standards among OECD asset owners. ClientEarth provides a detailed framework for the scheme to evaluate risk, reallocate assets away from coal and high-risk fossil fuels, and implement active stewardship and TCFD-aligned reporting.

• Pension trustees have a legal obligation to act in the best interests of members, which includes considering climate change as a material investment risk for both the scheme's assets and its sponsor.
• Fossil fuel assets, particularly coal, face significant financial risks; 54% of EU coal power assets already have negative cash flow, a figure expected to reach 97% by 2030.
• Climate-aware investing and the exclusion of high-carbon stocks do not necessarily reduce returns or diversification; some low-carbon indices have outperformed the MSCI ACWI benchmark over a five-year period ending in 2016.
• Market standards among OECD asset owners are evolving toward more robust climate governance, with 67% of reviewed asset owners having divestment policies and trillions of dollars committed to fossil fuel divestment.
• Current financial analysis often fails to price climate risk correctly because it relies on short-term forecasts (1 to 3 years) and suffers from a lack of available company data.

APA

ClientEarth (2018). Obligations to consider climate risk in relation to the investments of the British Steel Pension Scheme/New British Steel Pension Scheme. https://www.clientearth.org/media/lyvehddh/new-british-steel-pension-scheme-legal-letter-ce-en.pdf

Chicago

ClientEarth. Obligations to consider climate risk in relation to the investments of the British Steel Pension Scheme/New British Steel Pension Scheme. 2018. https://www.clientearth.org/media/lyvehddh/new-british-steel-pension-scheme-legal-letter-ce-en.pdf.

Wikipedia

{{cite press release |author=ClientEarth |title=Obligations to consider climate risk in relation to the investments of the British Steel Pension Scheme/New British Steel Pension Scheme |date=10 August 2018 |url=https://www.clientearth.org/media/lyvehddh/new-british-steel-pension-scheme-legal-letter-ce-en.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{clientearth2018obligations, author = {{ClientEarth}}, title = {{Obligations to consider climate risk in relation to the investments of the British Steel Pension Scheme/New British Steel Pension Scheme}}, publisher = {ClientEarth}, year = {2018}, month = aug, url = {https://www.clientearth.org/media/lyvehddh/new-british-steel-pension-scheme-legal-letter-ce-en.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }