Private companies can have their say on a new, best-practice blueprint for climate transition plans, published this week.
A new Disclosure Framework and accompanying Implementation Guidance are the work of the UK Transition Plan Taskforce (TPT), announced at COP26 by the UK Chancellor to develop the gold standard for private sector climate transition plans.
The TPT has also launched a Sandbox for companies and financial institutions to create their own transition plans and test implementation.
High quality transition plans are considered crucial for the transition to net zero. Credible transition plans create transparency and accountability for companies and financial institutions to meet their net zero targets, and enable investors to make better informed capital allocation decisions.
In January 2022, the Financial Conduct Authority (FCA) introduced rules for listed companies and large regulated asset owners and asset managers to disclose transition plans as part of their Task Force on Climate-Related Financial Disclosures (TCFD)-aligned disclosures, initially on a comply or explain basis. The first disclosures under these rules will be made in 2023. The TPT’s outputs will support UK firms and companies to publish high quality plans under existing rules.
Over the next two years, the FCA will draw on the TPT’s outputs to strengthen future disclosure rules for listed companies and financial firms.
The Framework emphasises the need for concrete, short-term action by companies and financial firms across the economy. The TPT recommends that companies and financial firms consider the full range of levers at their disposal to contribute to, and prepare for, an economy-wide transition to net zero. This will help avoid potential unintended consequences of ‘paper decarbonisation’.
Amanda Blanc, Group CEO of Aviva and Co-Chair of the TPT, said: “In recent years, we have seen a wave of private companies announcing their ambitions to contribute to net zero. We now need financial firms and companies to come forward with high quality plans to show how they will meet their targets. Transition plans are a key building block for delivering a net zero future. This is why the work of the TPT is so important. Building on the excellent work from GFANZ and the ISSB, the TPT Disclosure Framework will help ensure that everyone has a consistent understanding of what is needed.”
The Disclosure Framework and Implementation Guidance can be accessed from the TPT’s website. Read our short explainer on what makes a good net zero transition plan? on our sister site, the Energy Advice Hub.