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The year of new ESG frameworks and standards continues, and I am beginning to wonder if the ‘alphabet soup’ is re-thickening. This week, The UK’s Transition Plan Taskforce (TPT) released its Transition Disclosure Framework. The framework aims to be the ‘gold standard’ for companies to report their climate transition plans.
With more companies than ever setting net zero or other emissions reduction targets, the new framework will enable them to consistently and accurately show how they plan to get there. The objective is to give investors comparable and trustworthy information. In essence, standardized transition plans will show which companies have serious plans to achieve their climate goals and which do not. The new framework is designed to be “interoperable” (favorite buzzword) with the climate standards from the International Sustainability Standards Board (ISSB).
Sacha Sadan of the UK’s Financial Conduct Authority said, “Companies will need to think strategically about how they respond and contribute to the transition to a low emission, climate-resilient future.”
The TPT defines a transition plan as a “…plan to contribute to and prepare for a rapid global transition towards a low GHG-emissions economy.” As shown below, the framework is based on three guiding principles, “Ambition, Action, and Accountability,” and disclosures are categorized across five themes: Foundations, Implementation Strategy, Engagement Strategy, Metrics & Targets, and Governance.
Amanda Blanc, Co-Chair of the Transition Plan Taskforce, said, “Backing up net zero ambitions with high quality and clear transition plans is crucial if we are to collectively deliver net zero. The TPT Disclosure Framework will help businesses understand just what makes a climate transition plan robust and credible.”
Related Article: Tim Mohin: EU Launches World’s First Carbon Tariff
This Smart Read article is contributed by Tim Mohin, Global Sustainability Leader, BCG. Every week ESG News delivers smart commentary from ESG practitioners and experts to unpack issues of the week.