UK government launches new taskforce to develop best practice for UK climate transition plans

The UK government has announced the launch of the Transition Plan Taskforce (TPT), to develop a “gold standard” for climate transition plans in the UK (see press release). The aim is to help companies and the financial sector produce science-based climate transition plans that are credible, robust and “investable”. The TPT has been given a two-year mandate by the Treasury to deliver the best practice recommendations.

The TPT will be co-chaired by John Glen (Economic Secretary to the Treasury) and Amanda Blanc (Chief Executive of Aviva) and will involve a steering group including the FCA, other relevant regulators and corporates among others. The secretariat will be provided by climate change think tank E3G and the UK Centre for Greening Finance and Investment.

The requirement to publish climate transition plans will form part of the wider Sustainability Disclosure Requirements (SDR) outlined in the government’s Greening Finance Roadmap in October 2021 (see our previous blog post).

According to the Terms of Reference on the TPT website:

• Initially, certain firms will be required to publish transition plans that take into account the government’s net-zero commitment or provide an explanation if they have not done so (i.e. ‘comply or explain’). The plans will need to detail how firms will adapt and decarbonise as the UK moves towards a net-zero economy by 2050.
• The Chancellor has committed to making this a mandatory requirement for certain financial sector firms and listed companies by 2023. This is expected to encourage consistency and comparability in published plans and support more widespread adoption. The government expects to see the publication of firm-level transition plans become the norm across the UK economy.
• However, the government has said previously that, although there will be a requirement to produce a climate transition plan, there will be no requirement on UK companies and the financial sector to set a net zero target (see our previous blog post).
• The TPT will make recommendations for a sector-neutral Transition Plan Disclosure Framework that will enable science-based, standardised and meaningful transition plans, covering key elements including (but not limited to):
  • short, medium and long-term targets;
  • specific actions for climate mitigation and adaptation;
  • capex plans;
  • specific sectoral considerations such as fossil fuel phase-out plans; and
  • plans for scaling up new investment areas.
• The TPT will also prepare detailed sectoral Transition Plan Templates, with associated guidance on metrics and targets (for the finance sub-sectors and for key real economy sectors) and guidance on the role of governance and assurance, third-party verification and the implications of organisational transition plans for reporting.
• The TPT will consider and draw from existing work, including the TCFD recommendations (see here for the October 2021 TCFD guidance on transition plans), as well as related work by the International Sustainability Standards Board (ISSB), Climate Action 100+, the Institutional Investors Group on Climate Change (IIGCC), the Glasgow Financial Alliance for Net Zero (GFANZ) and the International Organisation of Securities Commissions (IOSCO).
• The TPT will initially report by the end of 2022. 
• The government is also planning to publish a net zero transition pathway for the financial sector this year, setting out how the sector is expected to transition to net zero by 2050.

Vanessa Havard-Williams, our global head of ESG, is a member of one of the TPT working groups.