Transition planning is a crucial part of adapting to an unpredictable future and lower carbon environment. It gives the roadmap for where companies are now, where they want to be, and how they plan to get there. All businesses need a plan for a future and investors in particular are calling for more reliable and comparable data so that they can make better informed decisions about capital allocations.
The UK Transition Plan Taskforce (TPT) was set up by the government to develop a “gold standard” for climate transition plan disclosures for the private sector.
In October 2023, the TPT published the final version of its Disclosure Framework, which is suitable for all sectors and sets out best practice recommendations for robust and credible transition plans disclosures (see our previous client briefing). The Disclosure Framework is accompanied by a raft of initial guidance. Further, sector-specific guidance is expected to be published on 13 November. Although the Disclosure Framework and accompanying guidance are currently voluntary, the government and the FCA will be consulting later this year and early next year on mandatory transition plan disclosures.
In our latest video, Vanessa Havard-Williams, who has played a part in the work of the UK TPT, speaks to Wilma Rix in our Corporate team on how to get started using the new TPT Disclosure Framework and guidance – including issues such as timing, how the TPT recommendations fit in with other existing climate disclosure obligations for UK companies, the role lawyers can play in helping their organisations with climate transition planning, and when to start.
One of the key messages for organisations is to start now, rather than waiting until all the sector-specific guidance have been finalised or until the requirement becomes mandatory. A credible and robust transition plan takes time to produce and may require introducing or adjusting internal governance processes, so the sooner you start on that process the better. As the TPT (as well as the TCFD and ISSB) have said on many occasions: “do not let the perfect be the enemy of the good”. It is better to have something now even if it’s not perfect than not have anything at all.
Stay tuned for our new blog post next week on the sector-specific transition plan guidance when the UK TPT publishes this on 13 November.