Transition Plan Taskforce launches new Working Groups and calls on investors and businesses to deliver more credible decarbonisation strategies
The government appointed Transition Plan Taskforce (TPT) has today called on businesses and investors to start publishing detailed net zero transition plans this year, warning that such plans are "crucial" to delivering on the UK's net zero goals.
The group, which brings together senior figures from government and business to advise on how corporates should develop and publish robust transition plans, today hosted its first meeting of the year as it confirmed a number of new members and working groups.
However, its overarching message was that a "significant increase in the quality and quantity of private sector transition plans is required to help enable the UK transition to net zero".
The group highlighted the recent analysis from CDP, which concluded that only 0.4 per cent of the organisations it analysed had credible transition plans in place.
Amanda Blanc, group CEO of Aviva and co-chair of the TPT, said that while "momentum is building on transition plans… this will only be sustained by firm action, a will to change and our ability to think beyond our own businesses".
"The TPT is there to help - not only through guidance, but also by connecting businesses together," she said. "I hope in 2023 we will start to see transition plans at every level - with companies, countries and international institutions setting out their routes towards a net zero future."
The group today confirmed a host of new organisations are to join its Delivery Group, with Diageo, SSE, and Railpen joining as members and the Department for Environment, Food and Rural Affairs, the Department for Work and Pensions, the Department for Business and Trade, the Financial Reporting Council, and The Pensions Regulator all joining as observers.
It also announced it is to expand its 'Sandbox', which gives organisations working on transition plans support in testing, refining, and scaling up their plans, as well as connecting to datasets, models, and tools that can help shape their plans.
And it confirmed plans for new Working Groups on the role of nature, climate adaptation, and the just transition in effective transition plans, while also announcing it is to commence work on debt and credit, the application and utility of transition plans in emerging markets and developing countries, and supporting small and medium-sized enterprises in the transition plan journey.
The new work programme aims to build on the publication last year of a draft Disclosure Framework and Implementation Guidance, which was launched for consultation at the COP27 Climate Summit in Egypt.
The final version of the guidance is set to be drawn upon by the Financial Conduct Authority as it looks to strengthen disclosure requirements on transition plans for listed companies and regulated firms.
Treasury Minister and co-chair of the TPT, Baroness Penn, praised the progress made by the group in the past year. "Transition planning is a crucial part of our path to net zero as it is the connective tissue between where firms are now and where they want to be," she said. "The TPT's work is a huge step forward in setting out clear recommendations for the preparation and disclosure of high-quality plans."
However, the comments come as the government and the FCA face growing calls from green business groups to confirm robust rules mandating firms to produce transition plans, with observers warning that clear guidance is urgently needed to ensure all listed firms produce the kind of detailed plans required by investors if they are to deliver on their net zero goals.
"Generally, there's no shortage of climate targets amongst big businesses," said Rachel McEwen, CSO of SSE and new TPT Delivery Group Member. "What there is, however, is a shortage of first-class action plans that deliver the targets. That's why the Transition Plan Taskforce is so important. We need a gold-standard framework, aligned to the real world, providing businesses with the guidance they need to make their targets a reality."
Her comments were echoed by Sarah Breeden, Bank of England executive director and TPT Steering Group Observer, who said: "Economy-wide transition plans are fundamental to enabling the financial system to allocate capital and manage risks through the transition. That is key to financial stability as facilitating an early and orderly transition will bring the fewest costs and greatest opportunities. Toward that goal, the taskforce's framework will help firms to disclose credible and comparable transition plans."
