Understanding investment impact with the CET

Since its inception in 2022, the Carbon Emissions Template (CET) has become an indispensable tool in the sustainable investment arena, particularly for insurers and fund managers. This blog aims to provide an in-depth look at the CET, emphasising its alignment with the Task Force on Climate-related Financial Disclosures (TCFD) and its crucial function in meeting various regulatory obligations.

Additionally, we’ll explore how platforms like SI Engage facilitate effective compliance and reporting in line with CET standards.

A closer look at the Carbon Emissions Template (CET)

Launched collaboratively by the Association of British Insurers (ABI), the Investment Association (IA), and the Pensions and Lifetime Savings Association (PLSA), the CET is a standardised framework for accurately reporting carbon emissions associated with investment portfolios. This tool is vital for pension schemes to understand the environmental impact of their investments.

Crucially, the CET is designed to help pension schemes fulfil their obligations under the Climate Change Governance and Reporting Regulations and the Department for Work and Pensions’ (DWP) Statutory Guidance. This regulatory framework mandates thorough reporting and governance regarding the environmental impact of pension schemes, underscoring the importance of the CET in ensuring compliance.

Additionally, the CET plays a significant role for insurers and asset managers in meeting their obligations under the Financial Conduct Authority’s (FCA) Environmental, Social, and Governance (ESG) Sourcebook. This alignment makes the CET not just a tool for reporting but a comprehensive solution for meeting a range of regulatory requirements in the financial sector.

CET’s alignment with TCFD and PLSA guidance

The CET’s alignment with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations ensures that it supports broader climate-related financial disclosures. Furthermore, the CET complements the Pensions and Lifetime Savings Association’s (PLSA) existing library of responsible investment and stewardship guidance, providing fund managers with a holistic approach to sustainable investment.

How SI Engage supports CET implementation

SI Engage supports fund managers with the integration of the CET into their practices. It provides:

1. Efficient data management: Streamlines the collection and organisation of emissions data, ensuring compliance with CET, TCFD guidelines, and regulatory requirements.

2. Comprehensive reporting capability: Facilitates detailed emissions reporting, in line with CET standards and supporting the requirements of the DWP and FCA’s ESG Sourcebook.

3. Analytical insights: Offers tools for interpreting emissions data, aiding in strategic decision-making aligned with environmental stewardship and regulatory compliance.

4. User-friendly integration: Ensures easy adoption of CET standards and integration with existing fund management systems, simplifying the transition to comprehensive ESG reporting.

The Carbon Emissions Template is an essential tool for asset managers, not just for ESG reporting, but as a key component in meeting regulatory obligations. Embracing the CET enables fund managers to navigate the evolving landscape of environmental regulations confidently. By utilising platforms like SI Engage, fund managers can ensure effective compliance, marking a significant step towards responsible and sustainable investing.

Sign up for weekly insights, including SI Engage and industry news