17 September 2025
Pensions UK welcomes the Government’s commitment to make the UK the green finance capital of the world by requiring financial institutions and FTSE 100 companies to publish credible transition plans aligned with the Paris Agreement. Policy interventions are vital to driving real-world decarbonisation, and this commitment is a crucial step in maintaining the UK’s leadership in sustainable finance.
Each policy option in the consultation brings benefits and challenges for pension schemes. However, transition plan rules must not devolve into generic, tick-box disclosures. Clear expectations and robust frameworks are essential to ensure plans remain investment-relevant.
The Government should build on TCFD while avoiding its shortcomings by sequencing requirements logically along the capital chain (companies, then asset managers, then pension schemes). Otherwise, disclosures will lack a reliable foundation.
Our members broadly support mandatory transition plans but call for clarity on whether this should follow a comply-or-explain or fully mandated approach. The EU’s phased model offers a useful reference.
Our members support the Transition Plan Taskforce (TPT) as the most effective framework for disclosure. Regardless of the policy design, cross-party consensus and coordination across departments will be essential to provide long-term certainty and investor confidence in decarbonisation-aligned investment.