Sector-specific net-zero transition plan guidance to launch this autumn
Targeted guidance on how large businesses in key high-emitting sectors and in finance can produce credible net-zero transition plans will be published in October.
The Transition Plan Taskforce (TPT) confirmed the new publications late last week.
The TPT was launched by the Treasury in April 2022. Following on from a a pledge that large businesses in high-emission sectors would be subjected to new net-zero disclosure requirements, the Taskforce began work to define what a credible transition plan should include.
Following initial top-line guidance on a ‘gold standard’ for transition plans, produced late last year, the TPT has now confirmed plans to issue sector-specific frameworks in October.
Frameworks will be issued for asset managers, asset owners, banks, electric utilities and power generators, oil and gas firms, metals and mining firms and large players in food and agriculture.
The TPT selected these sectors as the first movers following extensive consultations which included more than 500 organisations – including businesses, academia and other standard-setting bodies.
It believes that additional disclosure guidance would be “beneficial in kick-starting transition plan disclosures” ahead of a UK-wide mandate. This mandate was originally due to come into force in 2023 but this is now unlikely, edie understands.
Some businesses have already produced net-zero transition plans on a voluntary basis, such as Centrica and SSE. But research has repeatedly revealed that this is still an exception rather than a norm. An EY analysis of FTSE100 disclosures this spring found that 95% would not meet the UK Government’s definition of a ‘credible’ net-zero transition plan at present.
TPT co-chair Amanda Blanc, the chief executive of Aviva, said: “At Aviva, we can already see the powerful impact of transition planning, so I’m urging all UK listed companies to give it a go and use the TPT framework to develop their plans. No plan will be perfect first-time, but the TPT framework gives companies a head start and allows them to learn as they act.”
The results of the TPT’s consultations revealed, beyond a demand for sector-specific guidance and case studies, the private sector’s wish for assurances that UK disclosure standards would be aligned with those under development internationally.
This would enable international investors to make meaningful comparisons, and would lessen the disclosure burden on multinational companies.
Other G7 nations have pledged to follow the UK’s lead and mandate transition plans in the near future.
The TPT has stated that it is “is seeking to build global norms through extensive dialogue globally”. It is already working with the operators of the Taskforce on Climate-related Financial Disclosures (TCFD) and the International Sustainability Standards Board (ISSB).
TPT co-chair Baroness Penn said: “Firms believe international alignment is key. As these efforts unfold, there is a strong need to establish a common global norm on what constitutes a credible, high-quality transition plan. The TPT is actively supporting efforts to build consensus and avoid the proliferation of different standards.”
The ISSB, which was set up to streamline environmental disclosures globally, recently published its first two standards on climate-related risk. From next year, the ISSB will take over monitoring and other key responsibilities from the TCFD, in recognition of how its second standard has TCFD principles embedded.
Related feature: What makes a credible transition plan? We ask Ball Corporation
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