UK lauds transition gold standard

The UK’s Transition Plan Taskforce (TPT) today launched what it described as the ‘gold standard’ framework for companies and financial institutions to tackle climate change.

Some of the country’s biggest companies and financial institutions including Aviva, Legal & General Investment Management, London Stock Exchange Group (LSEG), NatWest, and Unilever, part of the taskforce were behind the creation of the new Disclosure Framework.

TPT said the Disclosure Framework is “informed by the principles of Ambition, Action and Accountability”. A company’s transition plan should take a strategic and rounded approach that explains how it will meet climate targets, manage climate-related risks, and contribute to achieving net zero it added. The Framework provides the basis for companies to set out credible and robust transition plans as part of annual reporting on forward business strategy.

Amanda Blanc, (pic) Group CEO Aviva Group, and co-chair of the Transition Plan Taskforce, said:

“It’s great to see more and more companies announcing their net zero ambitions, but these are of little use if there’s no action or accountability.”

“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.”

The documents published today build on the global baseline of disclosures developed by the International Sustainability Standards Board (ISSB) and draws on the work of the Glasgow Financial Alliance for Net Zero (GFANZ) TPT explained.

“The Disclosure Framework will support the creation of consistent, comparable company reports, and reduce the level of disclosure complexity faced by firms,” it added. “Publication of the Disclosure Framework is an example of UK climate leadership, and part of its COP26 legacy. The TPT’s work has already attracted significant interest from other jurisdictions”.

Additional guidance for preparers and users of transition plans has also been published today alongside the Disclosure Framework. This guidance includes:

  • High-level guidance across 40 sectors
  • Guidance on the climate transition planning cycle
  • Technical mappings and comparisons between the Disclosure Framework and several other well-known reporting frameworks
  • Legal considerations for companies preparing reports using the Disclosure Framework

Web-based implementation guidance

Baroness Penn, treasury lords minister, co-chair, Transition Plan Taskforce, added: “Under our COP26 leadership the Government set out that the UK would move towards making the publication of transition plans mandatory as part of our commitment to becoming the world’s first net zero-aligned financial centre. Launched only in April 2022, the Transition Plan Taskforce has now delivered on its core mandate to develop the gold standard for private sector climate transition plans.”

“The transparency and accountability offered by transition plans is vital to the fundamental shift in business and finance that is required for the economy-wide transition to net zero and a climate resilient future.”