Pension funds may be forced to report their exposure to climate change risks by 2022 under proposals put forward by the Environmental Audit Committee (EAC) today.

The cross-party group of MPs said structural incentives across the UK investment chain encourage a focus on short-term returns, often to the detriment of long-term sustainability.
Confusion about the extent to which pension trustees have a duty to consider environmental risks is also thought to be preventing investors from addressing the issue.
In response, the committee argue that mandatory climate reporting should be introduced for pension schemes and other asset owners on a 'comply or explain' basis by 2022.
"We need to fix the incentives in our financial system that encourage short-term thinking," committee chair, Mary Creagh, said. "Long-term sustainability must be factored into financial decision-making.
"We want to see mandatory climate risk reporting and a clarification in law that pension trustees have a duty to consider long-term sustainability, not just short-term returns."
The MPs said considering climate risk from the perspective of pensions is especially important given the long timescales involved, and the fact that hundreds of billions of pounds are tied up in schemes.
They believe savers should have a greater say in investment decisions, and that fiduciaries be required to actively seek the views of beneficiaries when producing Statements of Investment Principles (SIPS).
This would also apply to large companies, with the committee arguing firms should be given time to adapt to the new rules, but that a voluntary approach would not be effective in the medium-term.
This comes after the EAC found that 19 of the UK's 25 largest pensions funds acknowledge climate change as a risk, but that four schemes still do not make this distinction.
"It is encouraging that a majority say they are taking steps to manage the risks that climate change poses, but a minority appear worryingly complacent," Creagh continued.
"Pension funds should at least assess the exposure of their assets to the physical, transition and liability risks from climate change that will materialise during savers' lifetimes."