The Pensions Regulator has warned that trustees failing to meet their environmental social governance (ESG) and climate change reporting duties face fines of up to £50,000.

The regulator has launched an investigation into the issue.

It will include a regulatory initiative to check whether trustees are publishing important data on ESG.

Emails are being sent to DB, DC and hybrid schemes making clear that TPR is analysing scheme return data to monitor compliance.

TPR will check 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.

They must also publish an implementation statement (IS) – which shows how the principles in the SIP have been implemented.

A review of a cross-section of SIP and IS statements will follow in the summer.

The regulator 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.

It has the power to impose a fine up to £50,000 (where the trustee is a corporate body).

It is currently reviewing the SIP and IS data provided through the 2022 DC scheme return and said its initial analysis has highlighted that a number of schemes did not provide valid website addresses of the SIP and IS statements.

Nicola Parish, executive director of frontline regulation at TPR said: “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.”

TPR has published guidance for trustees to help them understand and meet their reporting duties.