Member

212: After Clause 117, insert the following new Clause— “Fossil fuels and climate change risk(1) The Pensions Act 1995 is amended as follows.(2) In section 41A (climate change risk), after subsection (6) insert—“(6A) Regulations under subsection (1) must, within 1 year of the Pension Schemes Act 2026 receiving Royal Assent, prohibit the trustees or managers of schemes of a prescribed description from holding relevant assets.(6B) The relevant assets in subsection (6A) are issuance by issuers which, in relation to thermal coal—(a) derive 10% or more of annual revenue from its production, transport or combustion,(b) produce annually 10 million tonnes or more, or(c) have 5GW or more of power generation capacity.(6C) Within 2 years of the Pensions Act 2026 receiving Royal Assent, and every 3 years thereafter, the Secretary of State must carry out and publish a review on whether the definition of relevant assets should be extended to include—(a) issuance by issuers which, in relation to thermal coal, derive a smaller proportion of revenue, produce a smaller amount or have a smaller amount of power generation capacity than the proportion and amounts specified in (6B),(b) some or all new issuance by issuers of a prescribed description deriving a prescribed proportion or amount of their revenue from the extraction, transport, trading or combustion of prescribed fossil fuels, or(c) some or all new or existing issuance by issuers of a prescribed description investing a prescribed proportion or amount in exploring for, or expanding the extraction of, prescribed fossil fuels. (6D) Regulations under subsection (1) may implement the conclusions of the review referred to in (6C).”(3) In subsection (8), at end insert—““thermal coal” means coal and lignite used in the generation of electricity and in providing heat for industrial or residential purposes;“issuance” means all investable assets, including equity and debt.”(4) The Financial Conduct Authority must make general rules with effects corresponding to the provisions of subsection (1) for providers of pension schemes to which Part 7A of the Financial Services and Markets Act 2000 (inserted by section 48 of this Act) applies.(5) The Secretary of State must make regulations with effects corresponding to the provisions of subsection (1) for scheme managers of the Local Government Pension Scheme.(6) The rules and regulations under subsections (4) and (5) must come into force no later than the date on which regulations pursuant to section 41A(6A) of the Pensions Act 1995 (as amended by this Act) come into force.”Member’s explanatory statement This new clause would require Government and the FCA to make regulations and rules on climate risk grounds restricting exposure of some occupational and workplace personal schemes to thermal coal investments and to regularly review whether the restrictions should be extended to other fossil fuel investments.