12 Feb 2025

Pensions watchdog responds to Make My Money Matter climate report

Analysis of 12 of the UK’s largest pension providers has been published by campaigning group Make My Money Matter (MMMM).

Responding to the figures, published today (Wednesday), Mark Hill, Climate and Sustainability Business Lead at The Pensions Regulator (TPR), said: “Climate change will impact the long-term performance of pension investments. Most pension schemes meet their legal duties, but our research shows many are only doing the minimum.

“People expect their money to be managed well and to receive the best value for their investments. We are challenging schemes to ensure they consider a broad range of material risks which could threaten their savers’ retirements.”

Contact Information

TPR Press Office
pressoffice@tpr.gov.uk

Notes to editors

Last July, TPR published its Market Oversight: ESG report, which described minimum compliance as:
- trustees make investment decisions that protect savers and are designed to deliver good member outcomes. This includes considering financially material risks and opportunities.
- through ESG publication and disclosure requirements, trustees set out the action they have taken to address these risks and opportunities.
- schemes with more than 100 members must publish a compliant statement of investment principles (SIP) and implementation statements (IS) on a publicly available and accessible website. Trustees must provide a link to the website in their scheme return.
- the IS should explain how, and the extent to which, trustees followed scheme policies on stewardship, including in relation to the exercise of rights, including voting rights and in undertaking engagement activities, set out in their SIP. This must include:
  - the most significant votes cast by the trustees, or on their behalf
  - a statement on the use of a proxy voters.
- There are additional requirements for trustees of in-scope schemes providing money purchase benefits including a description of any review of the SIP during the year, the explanation of any changes and the reasons for them. If no review was undertaken in accordance with the regulations, trustees should give the date of the last review.
In its climate change strategy, TPR committed to undertaking a regulatory initiative (RI) to review SIPs, where trustees disclose their ESG policies, and implementation statements, where trustees explain how they followed the policies in their SIP. This RI included:
- a quantitative review of around scheme returns. Announced in February 2023, this checked in-scope trustees had provided a weblink to their SIP and implementation statement.
- using machine-reading techniques to review the SIPs and IS. This helped identify whether documents contained the required ESG-related content. The findings were supplemented with validation and quality assurance by TPR staff based on a sample size of around 375 schemes.
- an in-depth review of ESG-related information around 50 schemes.