The Transition Plan Taskforce has launched new working groups while calling on investors and businesses to deliver more credible decarbonisation strategies.
The government-appointed Transition Plan Taskforce (TPT) wants businesses and investors to start publishing their net zero transition plans this year, claiming such plans are “crucial” to delivering on the UK’s net zero goals. TPT brings together senior figures from government and business to advise how corporates should develop and publish these transition plans.
The group said that a “significant increase in the quality and quantity of private sector transition plans is required to help enable the UK transition to net zero”. TPT highlighted recent analysis from CDP, which concluded that only 0.4% of the organisations it analysed had credible transition plans in place.
Amanda Blanc, group CEO of Aviva and co-chair of the TPT, said that while “momentum is building on transition plans… this will only be sustained by firm action, a will to change and our ability to think beyond our own businesses”.
“The TPT is there to help – not only through guidance but also by connecting businesses together,” she said. “I hope in 2023 we will start to see transition plans at every level – with companies, countries and international institutions setting out their routes towards a net zero future.”
The Group will give help and advice to businesses working on transition plans by supporting testing, refining, and scaling up, as well as connecting to datasets, models, and tools that can help shape their projects.
The new work programme aims to build on the publication last year of a draft Disclosure Framework and Implementation Guidance, which was launched for consultation at the COP27 Climate Summit in Egypt.
The final version of the guidance is set to be drawn upon by the Financial Conduct Authority (FCA) as it looks to strengthen disclosure requirements on transition plans for listed companies and regulated firms.
Treasury Minister and co-chair of the TPT, Baroness Penn, praised the progress made by the group in the past year. “Transition planning is a crucial part of our path to net zero as it is the connective tissue between where firms are now and where they want to be,” she said. “The TPT’s work is a huge step forward in setting out clear recommendations for the preparation and disclosure of high-quality plans.”
However, the government and the FCA have recently faced growing calls from green business groups to confirm rules mandating firms to produce transition plans, with observers warning that clear guidance is urgently needed to ensure all listed firms produce the kind of detailed plans required by investors if they are to deliver on their net zero goals.
“Generally, there’s no shortage of climate targets amongst big businesses,” said Rachel McEwen, CSO of SSE and new TPT Delivery Group Member. “What there is, however, is a shortage of first-class action plans that deliver the targets. That’s why the Transition Plan Taskforce is so important. We need a gold-standard framework, aligned to the real world, providing businesses with the guidance they need to make their targets a reality.”
Her comments were echoed by Sarah Breeden, Bank of England executive director and TPT Steering Group Observer, who said: “Economy-wide transition plans are fundamental to enabling the financial system to allocate capital and manage risks through the transition. That is key to financial stability as facilitating an early and orderly transition will bring the fewest costs and greatest opportunities. Toward that goal, the taskforce’s framework will help firms to disclose credible and comparable transition plans.”
The announcement follows the UK’s Net Zero Review, published in January, which detailed how the UK can achieve a ‘pro-business’ transition to its 2050 climate target. The Mission Zero report was commissioned by former Prime Minister Liz Truss to assess the best way for the UK to reach its legally binding 2050 climate target while maximising opportunities for economic growth, business prosperity, innovation and social sustainability.
The Review examined how poor policies and the array of incentives for low-carbon technologies on offer are hampering the private sector’s confidence and ability to invest in these areas.
To combat this the report came up with ideas such as, progressing incentives for investment in decarbonisation, implementation of a sustainable governance structure and bridging the green skill gap to help businesses hit net zero targets.
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