Transition Plan Taskforce Status Update
The Transition Plan Taskforce (TPT) is continuing their work to develop a Disclosure Framework, and supporting documents, that they hope will provide a standard for the development of transition plans across different sectors.
They define a transition plan as, “integral to an entity’s overall strategy, setting out its plan to contribute to and prepare for a rapid global transition towards a low GHG-emissions economy.”
The TPT states that a good transition plan should cover:
‘An entity’s high-level ambitions to mitigate, manage and respond to’ climate change;
Short-, medium- and long-term actions that will allow an entity to reach its goals and how these will be financed;
‘Governance and accountability mechanisms that support delivery of the plan and robust periodic reporting’;
Measures to address material risks and opportunities concerning the natural environment and stakeholder groups that arise from an entity’s actions.
The disclosure framework builds upon the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) and International Sustainability Standards Board (ISSB) to ensure consistency. Now that the International Financial Reporting Standards (IFRS) 1 and 2 have been published, the TPT will continue to ensure alignment with these standards.
The Disclosure Framework is being developed as numerous countries and regions are either mandating, or considering whether to mandate, the need for private companies to develop and present transition plans as part of their sustainability reporting. Brazil, New Zealand, Japan and most of Europe already have some form of transition plan requirements in place, while the US, Canada, South Africa, India and Indonesia among others have requirements under development.
As well as the Disclosure Framework, TPT are planning on publishing Implementation Guidance and Sector Specific Guidance. Detailed guidance will be provided for the following sectors:
Electric Utilities and Power Generators
Food and Agriculture
Metals and Mining
Oil and Gas.
While the final draft of the Implementation Guidance isn’t expected to be published until October 2023, TPT “encourages preparers of transition plans to use the draft Disclosure Framework and Implementation Guidance” as they contain the fundamentals that will continue to be incorporated through to the final documents.
Transition Plan Taskforce: https://transitiontaskforce.net/