TPR promises template for transition plans
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The Pensions Regulator’s transition plan working group will develop and test a voluntary transition plan template for pension schemes. The industry group will present the template to the Department for Work and Pensions later this year.
TPR is convening an industry group to work on transition plans, it was first revealed in the Department for Energy Security and Net Zero’s transition plan consultation published last month. The consultation also said that the Department for Work and Pensions will review the current climate disclosure regime.
The new group of TPR representatives and industry stakeholders currently being set up will “develop and test a voluntary net zero transition plan template fit for occupational pension schemes, drawing on the work of the UK Transition Plan Taskforce”, the regulator has now said, noting that there is no one transition plan template tailored to occupational pension schemes.
TPR's interim executive director of market oversight Julian Lyne will chair the working group.
Lyne said: "Sustainability initiatives should improve investment governance practices and help schemes make good long-term strategic decisions. That is why we plan to work with industry in advance of any legislation to make sure we deliver a transition plan template made by industry for industry and that provides high standards of stewardship and helps mitigate financially material systemic risks."
Developing net zero transition plans is a step trustees can take to help their schemes manage transition risks, from fossil fuels or other high-carbon industries losing value to the impact of general market volatility, as well as helping trustees access investment opportunities, according to the regulator.
Transition plans are not currently mandatory, but the DESNZ consultation, open until 17 September, proposes they could become so, as could a requirement to implement published plans. Labour’s 2024 election manifesto included a pledge to mandate transition plans for the financial services sector and FTSE100 companies. In 2019, the UK legislated to reach net zero by 2050.
TPR is convening an industry group to work on transition plans, it was first revealed in the Department for Energy Security and Net Zero’s transition plan consultation published last month. The consultation also said that the Department for Work and Pensions will review the current climate disclosure regime.
The new group of TPR representatives and industry stakeholders currently being set up will “develop and test a voluntary net zero transition plan template fit for occupational pension schemes, drawing on the work of the UK Transition Plan Taskforce”, the regulator has now said, noting that there is no one transition plan template tailored to occupational pension schemes.
TPR's interim executive director of market oversight Julian Lyne will chair the working group.
Lyne said: "Sustainability initiatives should improve investment governance practices and help schemes make good long-term strategic decisions. That is why we plan to work with industry in advance of any legislation to make sure we deliver a transition plan template made by industry for industry and that provides high standards of stewardship and helps mitigate financially material systemic risks."
Developing net zero transition plans is a step trustees can take to help their schemes manage transition risks, from fossil fuels or other high-carbon industries losing value to the impact of general market volatility, as well as helping trustees access investment opportunities, according to the regulator.
Transition plans are not currently mandatory, but the DESNZ consultation, open until 17 September, proposes they could become so, as could a requirement to implement published plans. Labour’s 2024 election manifesto included a pledge to mandate transition plans for the financial services sector and FTSE100 companies. In 2019, the UK legislated to reach net zero by 2050.
