“It will really help trustees understand and manage their scheme's exposure to climate-related risks and opportunities.
“However, data will be a big issue. Asset managers and others will need to get better at collecting and measuring the data, particularly in relation to private market assets.”
Tom Selby, head of retirement policy at AJ Bell, also welcomed the proposals but said there were a range of obstacles to overcome.
He said: “Devising reliable metrics on the environmental impact of stocks and funds is not an exact science, while trustees of pension schemes will continue to prioritise maximising long-term investment returns for members. Many would argue these aims can – and indeed should - go hand-in-hand.
“What’s more, just because climate reporting metrics are mandated, it doesn’t necessarily guarantee either a shift in investment focus or the broader member engagement needed to really push through meaningful behavioural change.”
Tom Higgins is a freelance reporter at FTAdviser's sister publication Pensions Expert