Government launches consultation on ‘gold standard’ framework for climate transition plans

The world's 30 biggest listed financial firms collectively provided $740bn to the fossil fuel industry in 2020 and 2021.

Last month, the Treasury unveiled a new Taskforce to oversee the development of a “gold standard” for climate transition plans for UK companies, a pledge that was made by Chancellor Rishi Sunak at COP26.

The UK Transition Plan Taskforce (TPT) was set up following the pledge from Sunak at COP26 to “rewire the global financial system for net-zero” through plans on sovereign green bonds and corporate climate disclosures.

Sunak confirmed that a mandate for all large businesses and public enterprises to develop net-zero transition plans by the end of 2024 will be introduced. Sunak claimed this should be supported and adopted by all major economies with a net-zero target in law. This pledge was reiterated in the recent publication of the Roadmap to Sustainable Investing.

The TPT has today launched a Call for Evidence seeking feedback on the key principles that should be accounted for and included in a transition plan.

The TPT aims to set up a “sector-neutral” framework for corporate transition plans and the new consultation – launched today (11 May) – is seeking feedback on whether transition plans should be aligned with the UK’s wider 2050 net-zero target, feature near-term action plans for decarbonisation and enable periodic and transparent reporting.

The TPT’s co-chair John Glen said: “I am delighted to be the co-chair of the Transition Plan Taskforce – a cornerstone of our mission to create a net-zero aligned financial centre.

“By creating the gold standard for transition plan disclosures, we are helping investors to mobilise the capital needed to accelerate the net-zero transition and holding companies to account for their emission reduction pledges. This call for evidence is only the first of many opportunities for stakeholders to enrich the Taskforce’s thinking and I look forward to receiving your feedback.”

The TPT will be led by a steering group of business leaders, and will be co-chaired by Economic Secretary to the Treasury John Glen Aviva’s chief executive Amanda Blanc. A supporting group has also been set up, consisting of representatives from the likes of Unilever, NatWest and Orsted.

The TPT will develop guidance for financial institutions and listed companies to help create transition plans, with a two-year mandate in place. The TPT will also inform the implementation of the UK’s Sustainability Disclosure Requirements.

The consultation will run until 13 July, after which, the TPT will develop a framework to assist with the publication of “robust” transition plans for financial institutions and corporates.