Momentum for a new climate transition planning framework
Following an initial announcement at COP26 in Glasgow, in April 2022 the UK Government asked E3G and the UK Centre for Greening Finance & Investment (CGFI) to convene the Transition Plan Taskforce (TPT) with the objective of establishing a best-practice framework for climate transition plans by the private sector.
The announcement came amid growing global momentum surrounding private sector transition planning. To date, more than 8,300 real economy companies and over 550 financial institutions globally have made net zero commitments and are working to set targets and develop underpinning transition plans. Even as transition planning has become an emerging norm in private sector practice, initial plans published have varied in detail and quality, limiting the ability of stakeholders to assess their credibility. This, in turn, has driven demand for standardized high-quality plans to make better-informed decisions about how to allocate capital.
“While it’s positive to see companies and financial institutions announcing net zero ambitions, these are meaningless if there’s no action or accountability. That’s why net zero targets need to be backed up with firm plans.”
DR. BEN CALDECOTT
Co-Head, Secretariat, TPT
Removing barriers to the net zero transition
The TPT was formed to work with and help inform the private sector around overcoming business planning and disclosure challenges, removing barriers to the net zero transition.
Based in the UK, the TPT has published a universal best-practice framework for transition planning to underpin the work of those private-sector organizations who have made public commitments to reach net zero. The new framework, released in November 2023, reflects the direct input of over 500 organizations including financial institutions, corporates, civil society and academia. This ‘big tent’ approach means that TPT’s work is applicable across geographies, cultures, and industries, with tailored guidance for asset managers, asset owners, banks, electric utilities and power generators, food and beverage suppliers, metal and mining companies, and oil and gas companies working worldwide.
Launch of the Transition Plan Taskforce’s final Disclosure Framework at the London Stock Exchange
In October 2023, the TPT launched its final Disclosure Framework, helping to draw global attention to the theory and practice of transition planning. This publication, which lays out five key elements of a good practice transition plan, adds to building momentum around systems transformation. Over the last six months, the G7 and G20 have come out in support of private sector transition plans, various international regulatory networks have started work on transition planning, and a rising number of entities have published their first transition plan. Alongside the UK, regulatory expectations relating to private sector transition plans and transition planning are now being developed across a range of jurisdictions including the EU, US, Singapore, Hong Kong.
All this global progress is in service of individuals and communities already experiencing the effects of climate change — and future generations threatened by its most severe impacts. Sequoia is proud to support high-ambition organizations like TPT who work tirelessly to transform markets, identify evidence-based solutions in the private sector aimed at reducing emissions, and advance policies that accelerate a just transition to clean energy. As we shift the focus from disclosure to delivery of transition planning, TPT’s framework and sector-specific will help hold the private sector to 1.5 degrees.
“A lot of it is about having multinational conversations. We’re able to do many more international engagements, and countries are eager to know what the UK is doing… This is all based on trust — policymakers, authorities and wider stakeholders need to trust us.”