On this page:
- Approaches to transition planning
- Summary of current standards and guidance
- Resources and tips to help you in developing your transition plan
- Recent updates
If they are to have the necessary impact, net zero commitments and targets across the economy must be turned into concrete action. Organizations stand the best chance of achieving net zero when they are guided by a comprehensive, action-orientated and holistic transition plan that is fully embedded within their strategy. Transition plans covering all parts of the economy – including the capital markets and the public sector – are needed.
“Transition plans translate an institution’s net-zero commitment into specific objectives and actions that are aimed at reducing real-economy GHG emissions, and providing credibility and accountability to net-zero commitments.” – Glasgow Financial Alliance for Net Zero, Financial Institution Net-zero Transition Plans: Fundamentals, Recommendations, and Guidance
“A climate-related transition plan is an aspect of an entity’s overall strategy that lays out the entity’s targets, actions or resources for its transition towards a lower-carbon economy, including actions such as reducing its greenhouse gas emissions.” – IFRS S2
CFOs and finance teams have a critical role to play in developing and delivering net zero transition plans. They can be involved in aligning financial plans with the transition plan, gathering and reporting data, or raising transition finance.
A4S practical examples
These practical examples provide insights into the actions finance teams can take across the areas highlighted in the table. Links to each organization’s full transition plan can be found below the table.
** The transition plans referenced within these practical examples were developed prior to the release of final guidance from TPT and GFANZ.
As transition plans are being regularly updated, those displayed above may have been published after the case study was compiled.
To assist finance teams further, A4S has produced a range of outputs on transition planning. We also have a series of Q&A blogs with GFANZ, TPT and TCFD, in which they discussed their guidance and how it complements other resources, the challenges being faced by organizations, and the key considerations for finance professionals.
TOP TIPS FOR FINANCE TEAMS
- September 2023: GFANZ, Defining Transition Finance and Considerations for Decarbonization Contribution Methodologies
- August 2023: UK FCA’s plans for implementing ISSB and TPT
- July 2023: TPT, Building Momentum for Transition Plans
- June 2023: GFANZ, Asia-Pacific Case Studies on Components of Financial Institution Net-zero Transition Plans
- 2 April 2023: EY, Only 5% of FTSE 100 have published Net Zero plans that would be deemed 'credible' under government's transition plan guidance
- February 2023: CDP, Are Companies Developing Credible Climate Transition Plans?