UK: Transition Plan Taskforce concluded its work and published final report

On 31 October 2024, the UK Transition Plan Taskforce (TPT) officially concluded its work and published a final report providing an overview of its achievements and future prospects. The report outlines key opportunities and challenges for the global adoption of transition plans, including enhancing market capabilities, sharing best practices, developing decision-making tools, and fostering global consistency in transition planning norms.

The TPT Disclosure Framework

Launched by the UK Treasury in March 2022, the TPT was tasked with developing a “gold standard” for climate transition plan disclosures for both the financial and real economy sectors. The TPT encompassed organisations from finance, industry, government, regulatory bodies, civil society and academia. On 9 October 2023, it released the TPT Disclosure Framework and accompanying guidance with good practice recommendations to help over 40 sectors in creating credible and robust climate transition plans (see our client briefing for more information). In April 2024, further guidance and advisory papers on nature, just transition and adaptation were published, supporting the application of the Disclosure Framework (see our blog post for details). 

The TPT Disclosure Framework aligns with the International Sustainability Standards Board's (ISSB) climate-related disclosure standard (IFRS S2), released in June 2023. It also corresponds with transition plans guidance for financial institutions published by the Glasgow Financial Alliance for Net Zero (GFANZ) in November 2022.

In June 2024, the International Financial Reporting Standards (IFRS) Foundation announced that it has assumed responsibility for the TPT’s disclosure materials and will use them to support company disclosures against IFRS S1 and IFRS S2. Over time, the ISSB will consider enhancing IFRS S2’s application guidance, leveraging TPT outputs. The materials are now available on the IFRS Sustainability Knowledge Hub. The TPT retains ownership of materials that go beyond disclosures, supporting the implementation of the TPT Disclosure Framework, that are available on the TPT website. 

Key TPT recommendations 

In its final report, the TPT underscores its recommendation for entities to follow three guiding principles – ambition, action and accountability – when designing climate transition plans. A transition plan should articulate an entity’s strategic ambition, comprising its objectives and priorities for responding and contributing to the transition towards a low-GHG emissions, climate-resilient economy. 

TPT advises a comprehensive approach, considering three interrelated channels: (i) decarbonising the entity by reducing its GHG emissions in its own operations and in its value chain; (ii) responding to the entity’s climate-related risks and opportunities, including its ambitions and actions to enhance its resilience to the changing climate and responding to climate-related risks and opportunities; and (iii) contributing to an economy-wide transition, for example by providing products and services needed to embed and accelerate a transition to a low-GHG emissions and climate-resilient economy. Adopting this approach is intended to protect and enhance an entity’s long-term value. 

The TPT concludes that a framework for “good” practice transition plans has now been established, and market and regulatory adoption is accelerating. However, there is still more to do to ensure that transition plans are adopted widely across the UK and global economy to drive progress towards global adaptation and mitigation goals. 

The report highlights four key areas where collective efforts could be focused in the future: (i) building market capabilities, practice and sharing experiences; (ii) developing enabling tools and driving thought leadership; (iii) ensuring that transition plans are integrated into decision-making (for example, C-Suites and boards should use transition plans as a change management tool); and (iv) increasing global consistency in transition planning norms and expectations. 

Next steps

A new International Transition Plan Network (ITPN), launched during New York Climate Week, will serve as a collaborative platform to support the development of global norms in private sector transition planning.

On 17 October 2024, the UK Transition Finance Market Review (TFMR) released its report with final recommendations on scaling an effective and credible transition finance market. It concluded that credible and comparable transition planning will play a critical role in underpinning the credibility of the transition finance market and recommended that the UK government should publish a forward-looking roadmap, outlining how and when it will implement transition plan disclosure requirements aligned with the TPT Disclosure Framework for the largest listed companies, private companies and financial institutions. For more information on the TFMR report, see our blog post. 

For more key materials on transition plans, see our Climate transition planning & transition finance collection.