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illuminem summarises for you the essential news of the day. Read the full piece on Responsible Investor or enjoy below:
🗞️ Driving the news: Major pension funds and financial sector stakeholders have urged the UK government to ensure that real economy companies—not financial institutions—are the first to face mandatory transition plan disclosure requirements
• In a recent consultation response, the £75 billion Universities Superannuation Scheme (USS) questioned whether it is appropriate to require transition plans from financial firms before the businesses they invest in disclose their own
🔭 The context: The UK is in the process of developing a regulatory framework for transition plan disclosures, with a Transition Plan Taskforce (TPT) already having published sectoral guidance
• The initiative is part of broader efforts to align financial flows with net-zero targets and improve market transparency
• However, concerns are mounting that placing early disclosure obligations on banks and pension funds—without equivalent commitments from corporates—could undermine the credibility and utility of the information provided
🌍 Why it matters for the planet: Credible, science-based transition plans are essential to ensuring that companies—and their investors—are genuinely aligning with net-zero pathways
• Requiring financial institutions to disclose plans without equivalent visibility from the underlying companies risks misrepresenting portfolio alignment and slowing the allocation of capital to sustainable transitions
• For effective climate finance, real-economy transparency must come first
⏭️ What's next: The UK government is expected to clarify its next steps following the consultation
• A phased approach is likely, starting with large corporates before expanding to the financial sector. Industry groups are calling for regulatory coherence and international alignment with frameworks like the ISSB and EU CSRD
• The final rules could set a precedent for other jurisdictions considering similar mandatory climate disclosure regimes
💬 One quote: “Transition plans in the financial sector are only as credible as those in the companies they invest in.” – Universities Superannuation Scheme (USS)
📈 One stat: USS, one of the UK’s largest pension schemes, manages over £75 billion in assets on behalf of more than 500,000 members
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