Essential Corporate News – Week ending 12 April 2024

Transition Plan Taskforce: New transition plan resources published

On 9 April 2024, the Transition Plan Taskforce (TPT) published a number of transition plan resources to help businesses unlock finance for net zero. Documents published include a Sector Summary document which provides an overview of transition plan guidance for 30 financial and real economy sectors, together with a number of sets of Sector Specific Deep Dive Guidance.

In its updated 2023 Green Finance Strategy published in March 2023, the UK Government announced that it was committed to consulting on the introduction of requirements for the UK’s largest companies (public and private) to disclose their transition plans if they have them, and that this consultation would take place once the TPT has finalised its framework.

In Primary Market Bulletin 45 published in August 2023, the Financial Conduct Authority announced that it would consult on guidance that sets out its expectations for listed companies’ transition plan disclosures, and that this would also be aligned with the TPT framework.

Sector Specific Deep Dive Guidance

Following publication of the TPT’s Disclosure Framework for transition plans in October 2023, in November 2023 the TPT published a consultation on certain sector-specific guidance (the Deep Dive Guidance) for preparers and users of climate transition plans to help them interpret the TPT’s Disclosure Framework in more detail for their sector. Those sectors were asset managers, asset owners, banks, electric utilities and power generators, food and beverage, metals and mining, and oil and gas. These sectors were chosen due to their greenhouse gas emissions, their need for (or their provision of) transition finance in the UK context, and the quality of existing guidance available in the market. This final Sector Specific Deep Dive Guidance has now been published.

Sector Summary for other sectors

The Sector Summary provides summary guidance only for the other sectors covered. It is designed to complement the TPT’s Disclosure Framework and the Sector Summary for each of the sectors covered includes an overview of that sector’s decarbonisation levers, metrics and targets and key sources of guidance for transition plans in that sector. That guidance is drawn from existing third-party guidance.

The Sector Summary includes a section on the hierarchy of TPT guidance within the overall transition plan disclosures landscape. It states that in jurisdictions where International Sustainability Standards Board (ISSB) Standards are to be adopted, preparers of transition plans are likely to look at IFRS S1 and IFRS S2 first for wider climate and sustainability disclosures. The TPT Disclosure Framework then builds on these and the TPT’s implementation guidance and transition plan guidance materials published by the Glasgow Financial Alliance for Net Zero (GFANZ).

Other resources published

The TPT has published further resources at the same time, including the following:

• Guidance on how to undertake a transition planning cycle.
• A paper on the opportunities and challenges of transition plans in emerging markets and developing economies.
• Independent advisory pieces from TPT Working Groups on Adaptation, Nature, JustTransition and SMEs, exploring how transition planning can extend beyond realising net zero.

These resources can be found here.

(TPT, Latest transition plan resources published today, 09.04.2024)

(TPT, Build Your Transition Plan)

(TPT, Sector Guidance)