Transition taskforce launches consultation on private sector

UK Transition Plan Taskforce is seeking industry feedback on decarbonisation guidelines

The UK-government mandated Transition Plan Taskforce (TPT) has launched a consultation on private sector climate transition plans. This will feed into a Sector-Neutral framework outlining decarbonisation guidelines for financial and non-financial companies to follow.

Created last month, the TPT was set up by the UK Treasury to ensure companies develop and publish rigorous and robust transition plans that detail how they will adapt and decarbonise as the UK moves towards a net-zero economy by 2050. This is part of the government’s commitment to become the ‘world’s first net zero-aligned financial centre’, as announced at COP26 last year.

In its first announcement since it launched, the TPT issued a Call for Evidence seeking feedback on what the key principles and elements are of a credible transition plan. Certain financial sector firms and listed companies will be required to publish a climate transition plan from 2023.

Through this consultation, the TPT will create a Sector-Neutral Framework for the private sector, which it said will enable “standardised and actionable transition plans”.

It will lay out:

  • The definition of a transition plan
  • Principles that should guide preparers of transition plans and provide a reference point for users seeking to understand the credibility of disclosed plans
  • Key elements that any private sector transition plan should cover, regardless of the sector of the preparing organisation
  • Accompanying guidance on the role of governance and assurance, third-party verification, and the implications of organisational transition plans for reporting

The consultation asks for the key principles that can guide companies to:

  1. Align with economy-wide net zero transition
  2. Focus on concrete actions that emphasise the near-term and are backed up by clear governance mechanisms
  3. Enable periodic reporting and verification in a transparent manner

John Glen MP, Economic Secretary to the Treasury and co-chair of the taskforce, said: “This call for evidence is only the first of many opportunities for stakeholders to enrich the taskforce’s thinking and I look forward to receiving your feedback.”  

Meanwhile, Michelle Scrimgeour (pictured), CEO at Legal and General Investment Management and member of TPT, added: “I am delighted to be a member of this taskforce to shape the transition to net zero and deliver on the commitments made at COP26. There is a real need for common, robust standards and policies to support how businesses frame their approach and develop their action plans. At LGIM, we recognise the benefits of collaboration: it is only by working together that we can bring about the significant shift that is needed in the face of climate change.”