Council pension fund faces judicial review over climate risk assessment

ClientEarth's claim – which has also been filed against the pension fund's actuary, Hymans Robertson LLP – alleges that the approach “falls well short” of standards set out by the Local Government Pension Scheme (LGPS).

Climate change is widely regarded as one of the main sources of risk for pension funds, and fund valuation reports all include sections analysing the impacts of potential climate scenarios.

The Royal Borough’s 2025 triennial valuation has a page dedicated to climate change risk. The page compares three scenarios ranging from a “positive reaction” to climate change, in which society develops effective green solutions, to a more pessimistic “negative reaction”.

However, the environmental law charity claims the council’s climate risk assessment appears to fall “well short” of the standards set by relevant LGPS materials, including advice issued under the LGPS statutory framework and Hymans’ own published approach to climate-risk analysis.

The Royal Borough has reduced employer contribution rates to 0% for its own employees. ClientEarth says that basing contribution decisions on a valuation that allegedly does not take proper account of material climate risk puts the long-term funding of the scheme at risk.

Alex Bennett, lawyer at ClientEarth, said the case "gets to the heart" of how public pension funds assess climate-related financial risk.

He added: "ClientEarth is asking the court to review whether Kensington and Chelsea Council, and its actuary Hymans Robertson, met the minimum legal standards required when assessing and explaining climate risk in the 2025 valuation and the related contribution decision.

“The case is not asking the court to set contribution rates. It is about whether the legal process for assessing material long-term financial risks was followed properly.”

A Kensington and Chelsea Council spokesperson confirmed receipt of the claim, but said it would be inappropriate to comment further while this matter is subject to litigation.

A spokesperson for Hymans Robertson meanwhile said the firm could not comment on the matter due to client confidentiality.

Adam Carey