The Pensions Regulator has issued a mandatory fine to the ExxonMobil Pension Plan over £5,000 for not meeting climate disclosure regulations, making it the first pension fund to be named and shamed for this failure.  

 

The trustees of the £7bn scheme, who look after about 20,000 members, said the report had been produced by the deadline but was not published in time because of an administrative error. They assured TPR that they took their climate reporting obligations seriously and that their non-compliance was inadvertent, according to the regulator. 

 

Nicola Parish, TPR’s executive director for frontline regulation, said: “In our role to protect savers, we take climate change requirements extremely seriously. Our case against the ExxonMobil Pension Plan shows we will and must act by using the mandatory fining regime set out in law.” 

 

Parish said TPR scrutiny will continue for the second phase of climate change reporting, when smaller schemes will be required to report. 

 

“The case serves as a warning to trustees about the importance of having proper governance and oversight where third parties are carrying out tasks on their behalf,” she added. 

 

A spokesperson for ExxonMobil said: “This issue resulted from a simple administrative error. We take our climate reporting obligations seriously and as soon as we discovered the issue, we corrected the problem.” 

 

Exxon’s marks the first fine against a pension scheme for failing to publish a report on trustees’ management and governance of climate-related risks and opportunities in line with recommendations by the Task Force on Climate-related Financial Disclosures. 

 

TPR investigated the publication of all 80 climate change reports in the first year and could not find the Exxon Pension Plan report online. It contacted the scheme trustees, and the report was published six days later. A penalty was issued in May this year, which was paid in July. 

 

The regulator has now published its intervention report, “to remind trustees about the regulations”. These came into force in October 2021 for schemes with at least £5bn in assets and were extended to schemes with £1bn or more a year later. 

 

Those in scope of the regulations must publish their climate change report by a set deadline on a publicly available website. Failure to correctly and on time publish a climate change report carries a mandatory penalty, with a minimum of £2,500. The maximum penalty is £5,000 where a trustee is an individual, or £50,000 where the trustee is a corporate body. The Exxon trustees are incorporated. 

 

 

The regulator has also published its compliance and enforcement bulletin for January to June 2023. The bulletin gives insight into TPR’s use of powers regarding auto-enrolment duties. It names the schemes that have received the largest fines. 

 

For the first time, TPR is also publishing a regional breakdown of its AE enforcement data, showing where in the UK penalty fines have been issued in the first six months of 2023. This only lists absolute numbers of fines without the corresponding number of employers, making it difficult to read anything into the figures. 

 

TPR’s director of automatic enrolment, Mel Charles, said: “Our use of AE powers has remained broadly consistent during the six months to June compared with the previous six months, with minor variations reflecting the profile of large cohorts of small and micro employers due to redeclare in that period.” 

 

He said naming companies that do not comply acts as a deterrent for others. 

 

Should pension funds be named and shamed for TCFD reporting failures?