The Pensions Regulator (TPR) has launched a campaign to ensure pension trustees are meeting their environmental, social, and governance (ESG) reporting duties, with a regulatory initiative to check if trustees are publishing key ESG data expected in spring.

TPR confirmed that it is currently sending emails to defined benefit, defined contribution (DC) and hybrid schemes making clear that it is analysing scheme return data to monitor compliance.

In particular, TPR will be checking whether trustees of schemes with more than 100 members (unless exempt) have published a statement of investment principles (SIP), which details the policies controlling how a scheme invests, including consideration of financially material ESG and climate factors.

TPR will also be checking that trustees have published an implementation statement (IS), which shows how the principles in the SIP have been implemented.

Following this, TPR is expected to undertake a review of a cross-section of SIP and IS statements in the summer, with the outcome of this review to be shared with industry to highlight good practice.

In addition to the upcoming regulatory initiative, TPR confirmed that it is currently reviewing the SIP and IS data provided through the 2022 DC scheme return, with initial analysis revealing that a number of schemes did not provide valid website addresses of the SIP and IS statements.

TPR will be communicating with these schemes next month.

The regulator also warned trustees of schemes in scope that enforcement action may be taken against them if they fail to publish their SIP and/or implementation statement, as TPR holds the power to impose a fine up to £50,000 (where the trustee is a corporate body).

Alongside this, TPR confirmed that it will be issuing a statement on Task Force on Climate-related Financial Disclosures (TCFD) reports in the spring.

TPR executive director of frontline regulation, Nicola Parish, stated: “All savers deserve to be in well-governed schemes which protect their retirements by appropriately managing and reporting on ESG and climate related risks and opportunities.

“These reporting disclosures represent compliance with the basic requirements in relation to ESG and climate change, so it’s disappointing some trustees are failing to meet them.

“Trustees who fail to comply risk us taking enforcement action against them and I expect to see an improvement in compliance levels.”

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