UKSIF welcomes the opportunity to respond to The Pensions Regulator’s (TPR’s) consultation on its proposed corporate strategy, A sustainable retirement income for all: Our Corporate Strategy 2026 to 2031.

In our response to the consultation, we focus on the importance of ensuring that TPR’s new corporate strategy clearly recognises the wider conditions on which sustainable retirement outcomes depend. We highlight certain areas where the regulator’s strategy could be clarified further for trustees and wider industry stakeholders, such as through greater recognition of the potential impacts of systemic risks, including but not limited to climate change, on the UK’s pensions system.

Executive summary

• UKSIF supports TPR’s proposed vision in its new corporate strategy of a pensions system that delivers a “sustainable retirement income for all”, and we welcome the strategy’s emphasis on member outcomes and a more system-wide approach to deliver against these.

• The strategy could be strengthened by more explicitly recognising the wider economic, financial, environmental, and social systems on which long-term retirement outcomes depend. This includes the financial materiality of climate change, nature loss, and other systemic risks. A resilient pensions system will need to be capable of adapting and responding to a range of systemic risks and opportunities over time.
• We welcome the corporate strategy’s recognition of a number of major trends shaping the pensions system, including: consolidation, scale, technology, artificial intelligence, and climate change. However, we recommend that the strategy builds on this, providing further detail and prominence to specific sustainability-related risks and opportunities, such as the potential investment opportunities for pension savers afforded by the UK’s and global transition to a low-carbon economy. This includes in new climate solutions and technologies and transition finance.
• TPR could also more clearly recognise the challenges to its vision and its objectives posed by changing labour market patterns in the UK and the persistent pensions savings gaps among certain demographic groups (e.g. women and the self-employed).
• Over the longer term following publication of the new corporate strategy, we would welcome a commitment by TPR to evolve its existing guidance and support for trustees on financially material systemic risks, both sustainability-related and wider risks. This should highlight practical actions and toolkits that trustees could consider in response to systemic risks.
• We encourage the regulator to continue to deepen collaboration on relevant policy and regulatory initiatives with the FCA, FRC, DWP, and other relevant bodies. One envisaged example is the upcoming DWP-led guidance to clarify fiduciary duty for UK trustees, with a role for TPR to help socialise this guidance alongside DWP and other groups with trustees over time. The strategy could more clearly recognise the benefits for pension schemes and pension savers of clearly defined regulatory responsibilities and consistency in policymaking wherever possible between different types of schemes.

An important, though sometimes underutilised, public policy tool available to investors seeking to influence the UK’s sustainability and climate policy environment is responding to public policy consultations. In our view, consultation responses sit alongside, and can usefully complement, other forms of policy engagement, including: collaborative public letters to policymakers, direct engagement (e.g. through meetings or wider roundtables), participation in government or regulator-led working groups, and involvement with membership bodies and wider coalition groups’ policy initiatives.

For many years, UKSIF has engaged actively on UK government and regulatory consultations on a range of sustainability-related issues, working closely with our diverse membership as part of this. We continue to view consultation responses as an important part of our programme of work to help shape a policy environment in the UK that can support sustainable finance and investment and the future growth of the country’s low-carbon economy.

Our UKSIF member guide sets out the main purpose of consultation responses in the UK context, how they can influence policy and regulatory outcomes, practical challenges in shaping policy decision-making through responses, and a series of takeaways that members could consider when preparing their submissions. We hope that our guide can be a useful resource for member firms currently involved in policy engagement activities in the UK, and in particular for firms at an earlier stage of involvement with consultation responses and policy advocacy work.

Key takeaways in our report include:

• Alongside your preferred positions, consider credible alternative ‘fallback’ options in your response
• Be selective- don’t feel obliged to respond to all, or even a majority of, questions in a consultation
• Ground arguments in clear evidence and actionable solutions, not just the challenges alone
• Consider the wider environment impacting policymakers’ thinking to help land your response
• Co-ordinate with your membership organisations, industry peers, and other external organisations to enhance collective impact

We believe the proposed measures in the consultation have the potential to enhance users of ESG ratings and wider stakeholders’ understanding and trust in these products, though our response sets out various recommendations for consideration from the regulator.

In our view, these recommendations would advance competition and innovation in the UK’s ESG ratings market, the practical operation of the UK’s regulatory regime for different market participants and stakeholders, and support the delivery of positive outcomes for users of ESG ratings, service providers, and financial markets at large.

Executive summary – main points in UKSIF’s response

• Support for the direction of travel of the consultation proposals: Broadly speaking, we are supportive of a number of the consultation’s main proposed measures. This includes the overall balance and details of the criteria set out under the ‘two-layer’ approach to disclosure, as part of the proposed transparency requirements for ESG ratings providers. We also welcome the wider rules highlighted on governance, internal systems, and conflicts of interest, and the application of the baseline standards to ratings providers.
• Maintaining competition and dynamism in the UK’s ESG ratings market: With that said, we recommend that FCA actively considers additional proportionate measures to support the role of smaller ESG ratings providers under the UK’s regulatory regime. This is a particular consideration as the ESG ratings market continues to evolve and mature. We believe this approach would bring tangible benefits to the UK’s ESG ratings market, users of ratings products, and rated entities, and be consistent with the regulator’s existing statutory operational objectives. While we recognise some challenges in adopting tailored measures for smaller, specialist providers, we outline various areas for exploration to support this specific group. This includes in relation to the regulator’s authorisations process and UK presence requirements. Also, we recommend inclusion of a defined ‘review period’ (e.g. after 3-4 years) for the regulator to assess the impacts of requirements on smaller providers and market competition. There may be lessons to be drawn from the European Union’s proportionality measures for smaller firms in time, as its regulatory framework beds in.
• Enhancing comparability in disclosures for users of ESG ratings: In relation to the transparency requirements, we would welcome high-level guidance on the envisaged presentation, length, and format of the minimum public disclosures and additional private disclosures. This would have the objective of supporting comparability and usability across ESG ratings providers’ disclosures. The regulator should consider encouraging industry-wide collaboration to develop a voluntary, ‘fund factsheet-style’ template for the minimum public disclosures. This could enhance the comparability in product-level information, by guiding users in assessing differences between products’ objectives, methodologies, assumptions, weightings, and ESG data coverage. As part of this, it would be useful to consider interoperability with similar template approaches in overseas jurisdictions, such as the EU. On the minimum public disclosures, the disclosure of ESG data estimates (where used) should be incorporated in this specific layer, with a baseline summary of a provider’s approach to data estimates valuable to include.
• Targeted changes to the ‘notification requirements’: We suggest several changes aimed at improving the operation of the notification framework, which we recognise is among the most challenging areas of the consultation. In our view, this includes confirmation that a prolonged period of delay and de-facto ‘veto right’ is not envisaged by rated entities on an ESG ratings provider’s assessment. Also, the FCA should provide indicative examples of what constitutes an ‘appropriate’ notice period from a provider to entities to clarify the rules. We believe refinements in this area of the consultation would minimise the risks of added reporting burden, especially for smaller ratings providers. There will be lessons to be drawn from the EU’s notification framework- one initial reflection is the two working-day window has been too short and led to challenges for market participants, particularly smaller rated entities.
• Treatment of asset managers’ internal ESG ratings: We would welcome clearer confirmation in the final policy statement that asset managers’ internal ESG ratings remain largely outside the scope of the UK’s regime. Further illustrative examples should be set out for when exclusions would apply. One envisaged example is where a fund manager discloses its use of a proprietary, internal ESG rating within product disclosures, or investor communications, for a labelled fund under the FCA’s Sustainability Disclosure Requirements (SDR) regime. Duplicative rules impacting this group, and institutional investors at large, should be minimised as far as possible, given the requirements for example outlined in the SDR and EU Sustainable Finance Disclosure Regulation (SFDR).
• Additional clarification for overseas-based ESG ratings providers: Further clarification would be beneficial for third-country ratings providers in relation to the upcoming authorisations process and long-term market access. This should aim to ensure that investors and other users of ESG ratings can continue to access ratings products and related products from non-UK based providers in a seamless manner, and without adding undue costs in the process for all groups. In relation to smaller ratings providers, it will be especially important to consider the authorisations process, making sure this does not pose a significant barrier to entry.
• Interaction with the voluntary UK Code of Conduct: We would very much welcome consideration by FCA and the International Capital Market Association (ICMA) over the future of the existing voluntary Code of Conduct and how it is envisaged to operate coherently alongside formal regulation. The interaction between the two initiatives will be very important in promoting clear expectations from policymakers to ESG ratings providers, users, and rated entities in the UK market. One option to maintain the voluntary UK Code’s ongoing relevance in the market in the longer-term would be to refocus its existing principles on ESG data products, given the regulation’s primary focus on ratings. As scrutiny of managers’ internal ESG ratings continues to evolve, a voluntary Code-based approach could be explored for this area of the UK’s market.

These recommendations draw on perspectives from across our membership network, which includes institutional investors as well as ESG data and service providers. We hosted a number of private member roundtables with both these groups to inform our response, though this does not necessarily reflect the views and perspectives of our entire membership, either individually or collectively.

While UKSIF largely welcomes many of the FCA’s consultation proposals, we would encourage the regulator to reconsider certain aspects of the measures to ensure that the UK framework can fully support the ISSB’s role in advancing transparency, comparability, and clarity in international sustainability reporting. Please find below our executive summary from our response.

Executive summary – main points in UKSIF’s response

• Support for evolution in the UK’s sustainability reporting landscape towards the SRS: We broadly welcome the proposed shift outlined by the FCA to replace existing climate-related disclosures for in-scope UK listed companies with requirements referencing the SRS S1 and S2. This represents an important milestone in the continued evolution of the UK’s sustainability reporting framework, which we expect will deliver tangible economic benefits and efficiencies for both in-scope companies and users of reporting (e.g. reduced cost pressures in time for preparers reporting). The SRS will in time deliver greater consistency in reporting and enhanced interoperability with global reporting standards, supporting investors with a global presence to more effectively compare their investments. It is positive to see the SRS S2 requirements as proposed largely applying relatively quickly from 2027 for listed companies.
• Clarity on Scope 3 GHG emissions reporting for in-scope companies: We recommend that the FCA sets out a clear and gradual pathway towards mandatory reporting of Scope 3 emissions for in-scope listed companies. We believe that such an approach would recognise practical challenges some organisations face in measuring and reporting Scope 3 data, while importantly providing forward-looking clarity on this area of reporting to companies, investors, and wider stakeholders. As part of a ‘mandatory pathway’, we would support the regulator setting out specific timeframes for mandatory reporting. For example, from 2030 by which point we would expect many in-scope companies will have built necessary capacity and understanding. Should this approach not be drawn on, our secondary preference would be for the inclusion of a defined ‘review clause’ (for example after 3-4 years) for the regulator to re-assess the approach to Scope 3 reporting.
• Changes to rules for companies with a secondary listing in the UK: A further key recommendation in our response relates to the proposed treatment of companies with a secondary listing in the UK. Our preferred recommendation is for this group to be subject to broadly equivalent disclosure expectations under the SRS as other in-scope entities, which we believe would build on the existing approach taken under the TCFD regime. This should include those secondary listed issuers based in a home jurisdiction where no climate-related reporting standards exist. Our response sets out secondary options for consideration to ensure a proportionate approach, while minimising material disclosure gaps among issuers.
• Reporting under the UK SRS S1: Similarly to our views on Scope 3 emissions reporting, we support confirmation of a clear and gradual pathway towards mandatory reporting under SRS S1 for in-scope listed companies, with specific reporting timeframes outlined. For example, this could be from 2030 onwards for mandatory reporting. This would be an important step particularly where sustainability-related information is financially material for investors. Our secondary preference would, similarly, be confirmation of a ‘review clause’ (for example after 3-4 years) by the regulator to assess the future approach to SRS S1 reporting for issuers, particularly as reporting practices among companies and wider stakeholders continue to evolve over time.
• Clarification on SRS disclosures applying to asset managers and FCA-regulated pension providers: We would welcome further clarification on the envisaged scope of the SRS requirements for these groups, with a view to minimising duplication in sustainability-related reporting at both product and entity-level. Some uncertainty remains around how the proposed ‘cross-referencing’ provisions would operate in practice for our members. Linked to this, we continue to encourage policymakers at large to provide clearer guidance on the practical transition from the current TCFD-aligned disclosure framework to SRS-based reporting for companies in the coming years. As the SRS regime is rolled out across the economy in the coming years, the regulator could consider a single source of information (e.g. on its website) that clearly outlines, in an accessible way, the scope of all companies subject to its disclosure rules. This would be for both listed issuers and institutional investors.
• Support for good-quality, proportionate transition planning across the economy: We look forward to seeing the outcomes shortly of the government’s consultation on climate transition plans, and we recognise that the FCA’s proposals will ultimately need to align with government’s wider policy direction and the conclusion of its process here. More broadly, we restate our support for policymakers to move forward with a ‘pathway approach’ to mandatory transition plan disclosure for large listed and large privately owned companies, building on the scope and foundations of the existing Task Force on Climate-related Financial Disclosures (TCFD) aligned regime.

We welcome the opportunity to respond to the Department for Work and Pensions (DWP) consultation on ‘Trust-based pension schemes: Trustees and governance, building a stronger future.’ Given the ongoing challenging geo-political environment, increasingly complex environmental and social context in which UK pension scheme trustees operate, and expansion in trustees’ responsibilities in recent years, the consultation from DWP is timely and very welcome.

Our response below draws on our ‘Unlocking UK pension capital for sustainable growth- Recommendations from UKSIF’s pensions review’ published in April 2025, as well as our previous response to the DWP’s call for evidence. UKSIF’s ‘pensions review’ outlined a series of policy recommendations on behalf of our asset owner network, aimed at putting the UK’s pension assets to work more effectively in the wider economy to drive positive outcomes for pension savers, while also providing benefits for the environment and society.

We focus on a subset of the consultation questions most directly relevant to UK trustees’ capabilities and understanding of sustainability-related risks and opportunities, such as climate change and other systemic risks. We express our broad support for the recent direction of travel of policymaking aimed at strengthening trustee governance, including in relation to financially material sustainability issues.

Summary- main points in UKSIF’s response

• The role of policy in addressing barriers to good trusteeship: We note a number of barriers in our response in relation to consideration of systemic risks, such as practical understanding and capacity, complexity in the reporting landscape, and uncertainty over fiduciary duty. With expectations on trustees continuing to quickly evolve, we would like to see regulators, including TPR, continue to evolve existing guidance over time to support trustees fulfil their legal duties and consider climate risk as part of this.
• Future guidance and support for trustees: Future iterative guidance for trustees- for example through updates to TPR’s existing Trustee Toolkits and other materials- should more directly incorporate a range of systemic risks beyond climate change, such as nature loss, human rights issues, and artificial intelligence. These pillars could be extended over time to include other systemic risks, with the overall objective to promote a good-quality ‘minimum baseline’ of awareness and understanding on these risks among trustee boards.
• Clarifying fiduciary duty in regard to systemic risks: We continue to identify issues relating to trustees’ interpretation of fiduciary duty in the context of growing recognition of the financial materiality of climate change and other systemic risks. We hope to see government’s upcoming statutory guidance provide further certainty and confidence for schemes, including those considering a range of sustainable and responsible investment approaches and more broadly investments in private markets in the UK.

Our report has surveyed 20 UKSIF members with £4.5 trillion in combined global AUM to gauge the investment community’s experience and use of sustainability data.

Report Headlines

• It found respondents overwhelmingly consider ESG information to be vital for decision-making, with sustainability factors viewed as central to their investment analysis, particularly regarding climate risk and governance. However, they felt the quality of the ESG data that they receive could be improved, with two-thirds rating it “moderate” and none rating it “very high”.
• When asked to describe their ‘biggest challenges’ with ESG data, 85% of respondents cited the accuracy of company disclosures, 70% highlighted their difficulty verifying or validating ESG data, and 70% pointed to gaps in ESG data coverage.
• These findings show the current state of company sustainability reporting is “fragmented and needs to evolve to help investors navigate the sustainability transition,” the report said.
• Lower standards of ESG data could result in material issues, such as funds being “misallocated due to hidden sustainability risks,” it further added.
• The report concludes there is a need for “a shift towards mandatory, standardised disclosures aligned with ISSB standards”, coupled with the introduction of climate transition plans. It says these measures could “directly address the data challenges and improve the consistency, completeness, and forward-looking nature of sustainability information.”

We have strongly welcomed the UK government’s decision to re-launch the Pensions Commission to consider the critical question of adequacy in pensions in the UK today and how, moving forward, we can deliver improved long-term outcomes for pension savers across the country.

In our letter, we welcome the opportunity to contribute to the Commission’s work programme and highlight a number of areas for exploration. This includes consideration of climate change and the global transition towards a net-zero economy, which we believe will be important for the Commission to explore and note that, at present, are not directly referenced in the Commission’s formal terms of reference from government. This also includes – as many different groups in the UK’s pensions and investment industries, as well as wider stakeholders, have highlighted – long-lasting reforms to automatic enrolment (AE) in the UK that can build on the success of AE to date in helping normalise pension saving.

Climate change cannot be divorced from the main focus areas highlighted in the Commission’s terms of reference. We suggest the Commission at a minimum highlight the need for the government’s pensions review to consider climate change and the global transition to net-zero. Specifically, a number of areas could be identified at a high-level for exploratory work for HM Treasury and the Department for Work and Pensions to consider, aligned to the Commission’s objectives.

This includes: clarification to fiduciary duty for occupational pension schemes in regards to system-level risks building on last year’s report from the Financial Markets Law Committee (FMLC); capturing investment opportunities for pension savers in the UK’s sustainable private markets landscape (such as clean energy infrastructure) including through a well-designed Value for Money (VFM) framework; the role of UK pension funds in advancing our international leadership position on transition finance; and the importance of a whole of economy transition for the pensions system’s long-term sustainability, including through supportive real economy incentives for schemes such as clear sector decarbonisation pathways.

Our thought leadership report on the FCA’s SDR regime- in collaboration with PwC UK- highlights a series of reflections on the experience of our asset manager members during SDR’s initial implementation phase, and sets out recommendations for our members to consider for effective implementation.

This covers labelling, disclosure preparation, governance, and communication, emphasising that, when applied well, the SDR regime can deliver clear benefits to firms. We have copied directly below some of the report’s main findings.

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Main findings

Our report highlights ten key findings:

1. Whilst there have been challenges in finalising the language in disclosures updated for SDR, many asset management firms highlighted the benefits of revisiting their approach to fund communications and disclosure over the course of the applications process with the FCA. Many asset managers stressed the value of the consumer-facing disclosures (CFDs) for more clearly explaining a fund’s sustainability objectives and approach.
2. The majority of labelled funds fall within the “Sustainability Focus” category, with more limited uptake of the “Improver,” “Impact,” and “Mixed Goals” labels.
3. While the SDR was designed as a principles-based regime, many asset managers found the FCA’s review process more detailed and prescriptive than expected.
4. Linked to this, asset managers said the prescriptive nature of the regulator’s approach to the regime led their firms to commit significant time and resources to its implementation.
5. The SDR’s ‘naming and marketing’ rules have become a significant feature of the regime, with higher-than-expected use by firms and this category being viewed by some as a “de facto fifth label”.
6. Many firms had completed comprehensive firm-wide ‘anti-greenwashing’ reviews and made targeted enhancements to align with the new regulatory expectations. Despite initial challenges, most asset managers noted that they have been able to adapt effectively to the new rule.
7. Most firms are planning to take a pragmatic approach to the upcoming SDR disclosures by evolving previous reports, such as their entity and product level Taskforce on Climate-related Financial Disclosures (TCFD) reports.
8. A consistent theme (mirroring last year’s SDR report) is a desire among market participants for greater international coherence in sustainability disclosures across different countries.
9. Asset managers observed a relatively limited appetite from distributors for labelled funds, yet firms thought distributor engagement would be important for the future market success of SDR labelling.
10. Firms also agreed that clarity from the FCA on the SDR’s trajectory, in particular its future extension to overseas funds, was as important as resolving near-term implementation challenges.

You can read the full report here.

This consumer guide, produced in partnership with Rathbones, as part of UKSIF’s annual Good Money Week, provides information on the new sustainable fund labels and how they work.

Please remember that this guide is not financial advice. It’s always best to speak to a financial adviser before making any investment decisions. A list of financial advisers that have signed up to UKSIF’s Financial Advisers’ and Wealth Managers’ Code of Conduct is available on our website here.

Read the full guide here. We hope you find this useful and informative.

Key takeaways for consumers include:

1. You don’t need to be an expert to start thinking about sustainable investment
2. Don’t be afraid to ask questions
3. Your views and values are unique
4. Remember no one label is ‘better’ or ‘worse’
5. The labels reflect a diverse range of approaches to sustainability

We welcome the opportunity to respond on behalf of our members to the government’s important consultation on the draft UK Sustainability Reporting Standards (SRS), based on the International Sustainability Standards Board (ISSB) disclosure standards.

As an internationally-leading financial centre and as a country that has played a vital role in recent years in shaping the priorities of the ISSB and its disclosure standards, we strongly believe that the close alignment of the UK’s upcoming SRS with the ISSB’s standards would mark an important moment in global efforts to promote a common, decision-useful baseline of sustainability and climate-related financial disclosures that can help advance long-term economic growth and the net-zero transition.

We largely agree with government’s amendments to the ISSB’s IFRS S1 and S2 standards and we very much welcome the consultation’s proposals that should assist with maximising opportunities for interoperability with the ISSB’s common baseline of sustainability and climate-related financial disclosures.

However, we note our preference for government’s approach not to amend the references to consideration of the SASB’s standards as currently proposed. Given, that this deviation from our view could facilitate the likelihood of less comparability and standardisation in disclosures among companies, and consequently in the wider economy, that could reduce the economic benefits of the UK’s SRS for investors and non-financial companies