Transition Plan Taskforce publishes its consultation on private sector transition plans

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15 Nov, 2022

At COP27 the UK’s Transition Plan Taskforce (TPT) published its consultation on what private sector companies need to do to implement and disclose a transition plan.

The TPT was launched by HM Treasury in April 2022 to develop a ‘gold standard’ for private sector climate transition plans applicable to the UK and includes representatives from the Government, regulators, industry, civil society, and academics.

The consultation consists of two documents:

  • The TPT Disclosure Framework - recommendations for companies and financial institutions to develop gold-standard transition plans.
  • The TPT Implementation Guidance – steps for companies to follow when developing their transition plan, as well as when, where and how to disclose their plan.

The TPT recommends that firms provide a standalone transition plan at least every three years and when material changes to any plan are made, if sooner. It also recommends that reporting progress and material updates against a firm’s transition plan should be provided within a firm’s annual reporting cycle, either as part of Taskforce for Climate-related Financial Disclosures (TCFD) or International Sustainability Standards Board (ISSB) disclosures. Additionally it says that if an entity produces a long-form TCFD or sustainability report, the transition plan must be clearly separable (e.g. as an appendix or separate document).

The TPT’s recommendations are intended to build on what was set out in TCFD guidance and ISSB exposure draft standards. The TPT’s recommendations are also structured around five elements which mirror the key components of a transition plan, as recommended by Glasgow Finance Alliance for Net Zero (GFANZ).

To accompany the consultation documents, the TPT has published Technical Annex to the Guidance to map the TPT recommendations to other wider sustainability reporting frameworks, such as the recommendations from TCFD and the ISSB proposed standards.

The TPT has also set up a Sandbox to give firms space to test how they integrate the TPT’s framework and guidance within their systems and reporting cycle.

Once TPT has finalised its work, it expects the Financial Conduct Authority (FCA) to use the Disclosure Framework to strengthen the disclosure requirements that it has already set out for listed companies, asset managers and owners, life insurers and pension providers that are regulated by the FCA.

The consultation survey closes on 28 February 2023 and the TPT is expected to finalise the Disclosure Framework and Guidance shortly after.

A press release, further information including a summary of the proposed recommendations and a link to the full consultation are available on the TPT website.

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