Transition Plans

Climate transition plans set out how a company will adjust its business model, operations, and investments to align with a pathway to net-zero greenhouse gas emissions, typically by 2050.

The development and governance of credible transition plans has become a key governance expectation, driven by investor demand, regulatory requirements, and the need to demonstrate strategic resilience. IFRS S2 requires disclosure of transition plans as part of climate-related strategy disclosures. The UK's Transition Plan Taskforce (TPT) has developed a gold standard framework for transition plan disclosure. ESRS E1 requires disclosure of the company's transition plan for climate change mitigation. Key elements include emissions reduction targets (aligned with science-based pathways), capital allocation plans, technology and innovation strategies, policy engagement positions, and governance and accountability mechanisms.

Further Reading

• G20/OECD Principles of Corporate Governance
• ESRS

Key Resources

• Transition Plan Taskforce (TPT) Framework
• Glasgow Financial Alliance for Net Zero (GFANZ)

Related Topics

• Board Responsibilities
• Disclosure & Transparency
• Sustainability & Resilience