The Pensions Regulator (TPR) is convening an industry working group to explore how pension schemes can manage the transition to a low-carbon economy.
In a blog post yesterday (31 July), the regulator’s climate and sustainability lead Mark Hill said the group would “develop thinking around a practical approach to transition planning for occupational schemes”.
The group will be chaired by Julian Lyne, TPR’s executive director of market oversight.
Hill said the regulator was inviting feedback from the industry on current practices, the challenges pension schemes are facing around transition planning, and the existing initiatives and proposals that could inform the group’s work.
Feedback is sought by 1 September.
In addition, Hill also encouraged pension schemes to engage with an ongoing government consultation on transition planning for the financial services sector and potential reporting requirements. While this is a broad consultation, the government has specifically mentioned pension funds.
This consultation closes on 17 September, and Hill said it was an opportunity to “shape what good looks like”.
‘Clear actions’ for trustees on climate transition plans
“In a changing pensions and regulatory landscape, trustees should not just comply but should also lead,” Hill said.
“Systemic risks are complex, and the future [is] uncertain – but the actions trustees can take now are clear.”
Mark Hill, TPR
“That means engaging with emerging frameworks like the Taskforce on Nature-related Financial Disclosures, supporting credible transition plans, and embedding sustainability into investment strategies.
“Systemic risks are complex, and the future [is] uncertain – but the actions trustees can take now are clear.”
Trustees should treat climate and nature-related risks as core financial concerns, Hill said, and ensure their long-term investment strategies are resilient to these issues.
He also urged trustees to use tools such as TPR’s Trustee Toolkit to “build your board’s ESG knowledge and confidence”.
