UK Pensions Regulator Urged To Develop Transition Planning Code

The UK pensions regulator is being asked to consider developing a transition planning code for asset owners after completing work with its Transition Plan Working Group.

The regulator formed the group last year with investment and climate specialists to develop and test a voluntary net-zero transition plan template for occupational pension schemes. Members included representatives from pension bodies, legal groups, and investment consultants. The group held its final meeting in January, ahead of a report that is expected to be submitted to the Department for Work and Pensions. The template was based on guidance issued by the Transition Plan Taskforce in 2024, which focused on disclosure of climate plans.

Several group members said a disclosure-based approach could result in a compliance exercise rather than informing decision-making. Some participants proposed a transition planning code combining elements of the UK Stewardship Code and transition guidance, with a focus on capital allocation and engagement. The proposal aligns with recent views from the Principles for Responsible Investment, which highlighted the difference between transition plans and transition planning. The regulator said it will publish the group’s findings later this spring.