Latest developments on transition plans

Global: ISSB takes over responsibility for UK TPT materials on transition plans 

The International Sustainability Standards Board (ISSB) announced in June 2024 that the IFRS Foundation (which is responsible for the ISSB) has assumed responsibility for the materials developed by the UK Transition Plan Taskforce (TPT) to help streamline global transition planning. 

In the near term, the IFRS Foundation expects to use the relevant TPT materials to develop educational materials for users and preparers of transition plans across the globe. Over time, the IFRS Foundation may make further use of these materials when considering the need to enhance the formal application guidance within IFRS S2 (the ISSB climate disclosure standard). The IFRS will host the TPT materials on its Sustainability Knowledge Hub.

Although the UK TPT materials on best practice on transition plan disclosures were initially commissioned by the UK government, the intention from the start was that they should be relevant and usable by companies globally so the fact that the IFRS Foundation has agreed to take over responsibility for these materials is a positive sign in the efforts to streamline global transition planning.  

EU: EFRAG is working on transition plan guidance under the CSRD

The European Financial Reporting Advisory Group (EFRAG) is working on draft Implementation Guidance to help in-scope companies disclose their transition plans in line with the European Sustainability Reporting Standards (ESRS) under the Corporate Sustainability Reporting Directive (CSRD).

EFRAG announced that they were seeking insights, in April-May, from a diverse group of European companies subject to the CSRD to provide input on the forthcoming guidance. 

We are still waiting for EFRAG to publish a draft of its Implementation Guidance on transition plans. 

For more information on the ESRS and CSRD, see our CSRD Demystified materials.

EU: Platform on Sustainable Finance to publish recommendations on transition plans for the financial sector 

It has been reported in the press (see here, subscription required) that the EU Platform on Sustainable Finance (PSF) is expected to publish recommendations for financial sector transition plans by the end of September. 

The PSF report is also expected to map transition plan requirements across the EU and explore how the Taxonomy and other EU tools can be integrated into financial sector transition plans. 

The PSF is also expected to publish a separate report on transition finance in the same period. 

EU & UK: Joint AFME / Linklaters report on transition plans for the European financial services sector

The Association for Financial Markets in Europe (AFME) and Linklaters have published a report to help banks in the EU and UK navigate the growing proliferation of initiatives related to climate transition plans. 

The report takes stock of current and upcoming standards and regulation, highlighting key developments and considerations. It considers climate transition plan developments focusing on the development of international, EU and UK frameworks. It also discusses trends in litigation, and NGO and shareholder scrutiny related to disclosures in climate transition plans. 

The report aims to provide a helpful reference point for navigating the increasing number of transition plan frameworks, covering not only the content of each of the frameworks but also their legislative timeline.

UK: Labour government to make transition plans mandatory

The new UK government indicated in the Labour Manifesto that they want to mandate UK-regulated financial institutions (including banks, asset managers, pension funds, and insurers) and FTSE 100 companies to publish and implement credible transition plans that align with the 1.5°C goal of the Paris Agreement. 

However, the new government has not yet announced when they plan to consult on this. 

For more information, see our blog post: New Labour government: is the UK back in the race to net zero?

Linklaters transition planning materials 

We have launched a new page on our website bringing together key materials on transition plans and transition finance. We will be updating this page to reflect key developments as they develop. See Climate transition planning & finance. 

To stay on top of the latest ESG developments including on transition plans, sign up for the Linklaters Sustainable Futures blog by clicking on “Subscribe” on the top left of the page.