‘Plans not pledges’: What makes a good climate transition plan?

Climate Transition Plans are the latest, sweeping tasks facing sustainability professionals. Many UK businesses will soon be subjected to a mandate on climate transition plan publications in the coming months. Indeed, the UK has set up the Transition Plan Task Force to shape a ‘gold standard’ for these plans.

The Task Force has recommended that corporates publish plans this year, then an update in 2026. In 2024 and 2025, information material to the plan should be included in financial reporting. Advice has also been provided on what, exactly, the plans should cover.

However, early movers in the area of transition plans are only just starting to emerge, and with research warning that many firms are failing to act on their net-zero pledges, transition plans could soon be what investors and stakeholders look at to differentiate climate leaders from the pretenders.

The world’s largest aluminium packaging producer, Ball Corporation, last month published a new transition plan detailing how it intends to deliver a net-zero emissions value chain by 2050 or sooner.

The plan increases Ball Corporation’s interim emissions reduction targets for 2030. It had previously been targeting a 55% reduction in Scope 1 (direct) and Scope 2 (power-related) greenhouse gas emissions by 2030, against a 2020 baseline, plus a 16% reduction elsewhere in the value chain (Scope 3) within the same timeframe. Now, the business is aiming for a 55% reduction in emissions across the entire value chain.

For the company’s global stakeholder relations director María Alegre, the transition plan is the latest step on Ball’s climate journey and one that has helped energise discussions around climate action both internally and externally while also explaining how each member of the company can contribute.

“Early responses [to the plan] have been very receptive and very positive,” Alegre tells edie. “We really want to ignite the discussion across our industry on this, because what we can achieve will rely largely on what can be implemented across the value chain.

“The key message we wanted to convey internally and externally is that this isn’t just a pledge, it’s a plan. It features different alternatives based on different transitions, so we have a plan A, B and C to adapt to different external circumstances. These pathways have reassured everyone internally, from operations to legal, and have outlined, very clearly, what people will be doing and how this will be integrated into business planning.”

The Transition Plan is the latest in a long line of climate milestones for Ball, which set its first decarbonisation targets back in 2004. Since then, science-based targets have followed and the company has joined initiatives like the First Movers Coalition to encourage the aluminium value chain to decarbonise.

The Plan outlines how Ball will strive to use 75% renewable electricity by 2025 and 100% by 2030, up from 28% in 2022. It is also targeting a 30% improvement in energy efficiency this decade.

Scope 3 emissions notably account for around three-quarters of Ball’s total emissions footprint, so the new plan sets out measures to better engage and support suppliers as they innovate on energy efficiency, clean energy, sustainable sourcing and material efficiency.

Advocacy

For Alegre, value chain decarbonisation is key, but so is how the company engages with policymakers in its key markets to ensure the right legislative frameworks are in place to assist with the company’s climate goals.

Ball has stated that it will only be able to achieve its transition plan in a scenario where national and regional policy frameworks become increasingly enabling the shift towards a net-zero economy and a more circular economy. As such, the plan covers policy advocacy.

“Our sustainability and public affairs teams are one and the same,” Alegre says. “So we have a very transparent and robust advocacy strategy focused on circularity and sustainability and leveraging existing policies that have already proven to work.

“But we’re not relying on offset and some of the advanced and complex technologies that have not yet been proven, so we’re heavily reliant on policy and alignment across the sector so we’re working in our key markets to try and trigger the right policies. The differences between our A, B and C plans is how these policies are deployed, how robust they are, and what solutions are viable with government subsidies.”

Alegre cites deposit return schemes and extended producer responsibility (EPR) legislation as prime examples of how policy can speed up the sustainability transition.

Transition trip-ups

CDP has previously stated that less than half a percent of 18,600 companies that disclosed climate information through its platform last year have a credible climate transition plan.

Earlier this month, however, EY analysis of the climate-related commitments and plans of FTSE 100 businesses has found that 95% would not meet the UK Government’s definition of a ‘credible’ net-zero transition plan.

According to EY, 78 of the FTSE 100 have published a climate plan in some form. But the vast majority of them do not meet the TPT standards. The most commonly omitted details pertain to how businesses intend to adapt their planning, including financial planning; their operational processes and their portfolio of products and/or services.

Only five of the firms were deemed by EY to be complying with the TPT’s recommendations.

For Alegre, it is important that companies setting transition plans follow the best practice that is already out there. Alegre points to the UN’s High Level Expert Group, which outlined a new set of key recommendations at COP27 to help these entities develop and deliver net-zero targets credibly, avoiding common greenwashing pitfalls.

“We were really guided by the High Level Expert Group advice] and we made sure we complied with the guidelines from the UN and the best practices out there,” Alegre adds.

“The good thing about the plan was that it was ‘homemade’. We did it completely internally and that helped a lot to achieve the level of alignment and commitment to gain buy-in from everyone in the company. From leadership to different regions and get them to believe that this is the right thing to do and that it is achievable.”