The Pensions Regulator (TPR) has announced plans to work with industry stakeholders, advisers, and professional bodies to develop and test a voluntary net-zero transition plan template that is fit for occupational pension schemes.

The work builds on the previous efforts of the Transition Plan Taskforce (TPT), as TPR said that the ultimate template, which will be presented to the Department for Work and Pensions this year, will be based on the framework and guidance developed by the TPT.

TPR said that transition plans can help organisations, including occupational pension schemes, prepare for the government’s goal of transitioning the UK to a net-zero nature-positive economy by 2050.

Whilst not currently a mandatory requirement, TPR argued that transition plans have the potential to catalyse change and help shape investment decisions in the interests of savers.

Given this, it said that developing them is a proactive step trustees can take to help their schemes manage transition risks, such as investments in fossil fuels or other high-carbon industries losing value or the impact of market volatility.

With no specific template currently available, TPR confirmed that it will be working with the industry to provide a transition plan template designed for and tailored to occupational pension schemes through a transition plan working group.

TPR interim executive director of market oversight and chair of the planned working group, Julian Lyne, said: "Sustainability initiatives should improve investment governance practices and help schemes make good long-term strategic decisions.

"That is why we plan to work with industry in advance of any legislation to make sure we deliver a transition plan template made by industry for the industry and that provides high standards of stewardship and helps mitigate financially material systemic risks."

Mandating transition plans aligned to the Paris Agreement goal of limiting global temperature rises to 1.5C was included in the Labour Party's pre-election manifesto.

In addition to ongoing regulatory work, the DWP recently confirmed that it is considering whether to update the current rules surrounding pension schemes' sustainability reporting, with plans to review the 2021 Climate Change Reporting Regulations this year as part of this.

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