What’s the context?

“Transition planning is a process that entities undertake to define a strategic roadmap for their transition towards net zero”
– Transition plan requirements consultation June 2025

There are many possible definitions of the term, but a “transition plan” is simply a plan of action as how to participate in and respond to the transition to a low carbon economy. The plan needs to be acted upon, not simply drawn up.

In May 2024 the then Government announced that the forthcoming UK Sustainability Disclosure Requirements would encompass net zero transition plan disclosures alongside UK sustainability reporting standards and the UK green taxonomy.

HM Treasury announced its the Transition Plan Taskforce at COP26, the 26th UN Climate Change Conference of the Parties in Glasgow 2021. The taskforce was given a remit to develop a cross-economy framework for transition plans for all kinds of institutional investor and business. Its aim was to provide a global gold standard.

Transition planning is also integrated within International Financial Reporting Standards (IFRS) disclosure standard S2 on climate-related disclosures. In 2024, the IFRS took over responsibility for the Transition Plan Taskforce Disclosure Framework, which provides a good guide to what a transition plan needs to contain.

It has produced guidance aimed at various sectors about the framework, including for asset owners (covering pension funds).

For details on what net zero means for pension schemes and the current regulatory position, see Net zero

What are the latest developments?

TPR’s Pathway to net zero report was published in March 2024 indicating that a transition plan would follow in 2024/2025.

In June 2025, the Department for Energy Security & Net Zero published a consultation on climate-related transition plan requirements. This explained how the Government can fulfil its manifesto promise of requiring financial institutions (including pension funds) to develop and implement credible transition plans aligning with the 1.5°C goal of the Paris Agreement.

Later, in July 2025, the Pensions Regulator (TPR) announced it would establish a transition plan working group to develop a voluntary net zero transition plan template for occupational pension schemes.

The ultimate template will be based on the framework and guidance by the UK Transition Plan Taskforce and will be presented to the Department for Work & Pensions (DWP) in 2026.

In addition, the DWP plans to undertake a review of the Climate Change Governance Regulations “this year” (referring to 2025), looking at the impact of the current disclosure regime and considering potential next steps.

Therefore, although there any currently no specific mandatory requirements in the UK for pension schemes to publish a transition plan setting out how they will decarbonise in the time up to 2050, the consultation outcome may change this. Some schemes, including Royal London and Nest, have published transition plans.