The Pensions Regulator has launched a campaign to ensure that trustees are meeting their ESG and climate change reporting obligations.

Trustees of occupational pension schemes with 100+ members are required to prepare:

  • A statement of investment principles (“SIP”) which, among other things, must include the trustees’ policy in relation to financially material ESG and climate change considerations.
  • An annual implementation statement setting out how certain aspects of the SIP have been followed during the scheme year.

Both documents must be published on a website that is accessible free of charge by the general public. Trustees must report on compliance with this obligation in the scheme return.

As part of the campaign, the Regulator will launch a regulatory initiative in the spring to check whether trustees have published their SIP and implementation statement. A review of a cross-section of SIPs and implementation statements will follow in the summer. The outcome of this review will be shared with the industry to highlight good practice.

The Regulator may take enforcement action against trustees if they do not publish their SIP and/or implementation statement. Initial analysis of 2022 DC scheme return data has shown that a number of schemes did not provide valid website addresses for the SIP and implementation statement, and the Regulator will be contacting these schemes next month.

Trustees of schemes with £1 billion+ in assets must also produce an annual “Taskforce on Climate-Related Financial Disclosures” (“TCFD”) report. The Regulator will be issuing a statement on TCFD reports in the spring.