COP27: Private sector net-zero transition guidance launched

HM Treasury’s UK Transition Plan Taskforce (TPT) has launched a new framework to assist private sector companies in the disclosure of climate transition plans.

The Disclosure Framework, announced this week at the COP27 climate change summit in Egypt, will seek to encourage “concrete short-term action” and “greater accountability” in the delivery of effective transition plans.

“Transition plans are a key building block for delivering a net-zero future. This is why the work of the TPT is so important,” said Amanda Blanc, Group CEO of Aviva and co-chair of the TPT,

“In recent years, we have seen a wave of private companies announcing their ambitions to contribute to net-zero. We now need financial firms and companies to come forward with high quality plans to show how they will meet their targets.”

The TPT has also characterised the Framework as the “gold standard” for transition disclosures, adding that it will be utilised by the Financial Conduct Authority to strengthen its transition plan disclosure rules.

The Framework, and its accompanying Implementation Guidance, are open for public consultation until February 2023.

The TPT has also launched a sandbox that will test the Disclosure Framework and Implementation Guidance to enable preparers and users to create their own climate transition plans.

The launch of the Disclosure Framework comes a year on from the announcement of the TPT’s creation at COP26 in November 2021. The TPT’s official formation came six months later, in May 2022.

Its purpose, according to HM Treasury, is to support the UK’s 2050 net-zero pledge by ensuring that companies demonstrate greater transparency as to how they will decarbonise.

To achieve this, the Framework draws on existing and emerging guidance from the Taskforce on Climate-Related Financial Disclosures and the International Sustainability Standards Board.

The Institute for Chartered Accountants in England and Wales’s chief executive, Michael Izza, and director of sustainability, Richard Spencer, both sit on the TPT’s steering committee.

According to Izza, the new Disclosure Framework and Implementation Guidance can “play a key role” in equipping UK public limited companies with the resources to deliver on net-zero targets.

“The Implementation Guidance crucially covers how to report consistent, comparable and decision-useful information in transition plans, as well as how often and where to disclose transition plans,” he said in a statement.

Alongside Aviva’s Blanc, the Taskforce is co-chaired by Andrew Griffith, MP for Arundel and South Downs and economic secretary to the Treasury.