The Pensions Regulator (TPR) has recently announced its intention to work closely with industry stakeholders to pilot a voluntary net-zero transition plan template tailored for occupational pension schemes. This initiative marks a significant step in supporting pension trustees as they navigate the complexities of climate-related risks and opportunities, and aligns with the broader push towards the government’s goal of transitioning the UK to a net-zero economy by 2050.[1]
Why a net-zero transition plan matters
Occupational pension schemes play a crucial role in the UK’s journey to net-zero. As large institutional investors, pension funds have both the influence and the responsibility to drive positive change through their investment decisions. A well-structured net-zero transition plan provides a clear roadmap for schemes to decarbonise their portfolios, manage climate risks and seize opportunities arising from the transition to a low-carbon economy.
TPR’s collaborative approach
Recognising the diversity and complexity of the pensions landscape, TPR is seeking to ensure that any transition plan template is practical, proportionate and genuinely useful for trustees. By engaging with industry bodies, pension funds, advisers and other stakeholders, TPR aims to test and refine the template before wider adoption. This collaborative approach is designed to:
- ensure the template reflects the real-world challenges faced by schemes of different sizes and structures;
- gather feedback on usability and effectiveness; and
- promote consistency and comparability in climate-related disclosures across the sector.
Voluntary, not mandatory – for now
It is important to note that participation in the pilot is voluntary. TPR’s current focus is on developing best practice and building capacity within the industry, rather than imposing new regulatory requirements. However, TPR has signalled that robust transition planning will become increasingly important as climate-related disclosure expectations evolve. It notes that mandating transition plans aligned with the Paris Agreement goal of limiting global temperature rises to 1.5°C was included in the Labour Party’s pre-election manifesto.
What trustees should do next
Trustees should stay informed about developments in this area and consider how a net-zero transition plan could benefit their scheme. Early engagement with the pilot process may offer valuable insights and help schemes prepare for future regulatory expectations. Trustees are also encouraged to review their current approach to climate risk and ensure it aligns with TPR’s guidance and the broader direction of travel in the pensions industry. As there is potential for mandatory participation, trustees of occupational schemes should anticipate and work towards compliance with a net-zero transition plan.
Final thoughts
TPR’s announcement underscores the growing importance of climate action within the pensions sector. By working collaboratively to develop a voluntary net-zero transition plan template, the regulator and industry stakeholders are taking a proactive step towards a more sustainable future for pension savers and the planet.
[1] https://www.thepensionsregulator.gov.uk/en/media-hub/press-releases/2025-press-releases/pensions-industry-and-regulator-to-join-forces-to-address-net-zero-transition-risks
