23 Oct 2023

Transition Planning Toolkit: Briefing

Part 1 of the Transition Planning Toolkit. Companies need to develop a plan for delivering on net zero targets and pledges. High-quality transition plans enable management teams to develop, communicate and implement their climate strategies.

Transition Planning

Transition Plans are becoming the new norm in the private sector climate journey.

We will need a fundamental transformation of business and finance if we are to successfully transition to a low-emissions, climate-resilient economy. Every company will need to think carefully about what the transition means for them. They will have to think strategically about how they can protect and enhance long-term value by responding and contributing to a whole-of-economy transition

High-quality transition plans enable management teams to develop, communicate and operationalise their climate strategies. A transition plan can focus attention, highlight key issues to be escalated to the board and instigate fundamental change in the business .

Under existing law and regulation, UK-listed companies and most other UK-registered companies and LLPs with more than 500 employees are expected to make climate-related disclosures in line with the recommendations of the global Taskforce on Climate-related Financial Disclosures (TCFD).

In the case of listed companies, the FCA expects disclosure of transition plans and directly references relevant TCFD guidance. The FCA has signalled its intention to strengthen these regulatory expectations. In the meantime, the FCA has encouraged listed companies to supplement their existing reporting with reporting aligned with both the new sustainability-related disclosure standards issued by the International Sustainability Standards Board (ISSB) and the Transition Plan Taskforce (TPT) Disclosure Framework on a voluntary basis.

What is a Transition Plan?

“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.”

Source: IFRS S2 Appendix A

The Transition Plan Taskforce

The TPT, a UK government initiative with extensive industry representation was launched in April 2022 to develop the ‘gold standard’ for private sector climate transition plans. In October 2023, the TPT issued the final TPT Disclosure Framework (the ‘what’) and online Implementation Guidance (the ‘how’).

The framework was developed through a collaborative effort drawing from the wide range of expertise across the market, with over 100 organisations across finance, business, civil society, government, and academia having supported the development of the framework and over 500 organisations engaged in testing its robustness.

The TPT has ensured international consistency, having regard to the recommendations of the TCFD and the ISSB and aligning with, and drawing on, the Glasgow Financial Alliance for Net Zero (GFANZ) framework for credible, comprehensive and comparable net zero transition planning.

The TPT builds from the definition of a climate-related transition plan set out in the ISSB’s climate disclosure standard (IFRS S2), recommending that a good practice transition plan will set out an entity’s Strategic Ambition for responding and contributing to the transition towards a low GHG-emissions, climate-resilient economy.

The TPT Disclosure Framework. Source: TPT Disclosure Framework (see original diagram)

The GFANZ and TPT frameworks provide additional depth and detail to help preparers report effectively on transition-related disclosure requirements in the ISSB standards. Source: TPT Disclosure Framework (see original diagram)

Note: The TPT Products Suite available at Build Your Transition Plan includes the Disclosure Framework, online Implementation Guidance, technical mappings between the Disclosure Framework and the ISSB and TCFD Standards and Recommendations, and a comparison between the Disclosure Framework and the European ESRS Standards. These sector-neutral guidance documents are accompanied by a Sector Summary which provides extra guidance on 40 sectors across the economy. A document looking at legal considerations for companies preparing plans using the Disclosure Framework is also available. Later in 2023, the TPT will release draft deep dive guidance for seven sectors, for consultation.


Transition planning and the reporting landscape for UK companies

This timeline is based on TPT's July 2023 Status Update.

For a more comprehensive overview of the reporting landscape, refer to the navigating the climate disclosure landscape explainer and the accompanying climate disclosure tool.

Reporting against the Taskforce for Climate and Financial Disclosures (TCFD) framework is in force and mandatory for most large UK firms from 2022. TCFD sets a framework for climate-related financial disclosure based on four pillars: Strategy, Governance, Risk Management, and Metrics & Targets. In July the FSB asked IFRS Foundation to take over the TCFD's responsibilities from 2024, noting that the TCFD recommendations had been absorbed into the ISSB standards.
In October 2023 the Transition Plan Taskforce (TPT) published its final disclosure framework and implementation guidance. It is expected that the UK FCA will consult on the inclusion of the TPT guidance when implementing the ISSB standards.
In 2023 the International Financial Reporting Standards (IFRS) Foundation’s International Sustainability Standards Board (ISSB) issued two Sustainability Disclosure Standards: one on general sustainability-related disclosures and one on climate-related disclosures. Reporting under ISSB will initially be voluntary although ISSB’s goal is that international regulators will endorse the standards for mandatory use worldwide. The UK have signalled that it will implement the standards, and the FCA has set out an approach for this. The International Organization of Securities Commissions has endorsed the ISSB standards and encouraged securities regulator around the world to adopt them in their legal and regulatory frameworks.


Voluntary Frameworks:​ Companies have the option to use voluntary disclosure frameworks, including CDP, GRI and the upcoming Task Force on Nature-Related Financial Disclosures (TNFD). Disclosing to these standards and frameworks helps organizations be transparent and take responsibility for and action on impacts on climate, nature and other interlinked sustainability issues.​

As a NED, what is your role in Transition Planning?

Transition planning will impact the core direction of travel for your company, and as a NED you need to be involved. Many of your existing responsibilities as a NED are relevant in the context of climate-related risk and opportunity, and transition planning. These include shaping the strategy and development of the business, financial planning, oversight and disclosure.

As a NED, you are particularly well positioned to mobilise the development of a transition plan given your ability to bring an independent voice and perspective to your board, and your access to a peer network which is also engaged in the process.


Board oversight

"Because transition planning is an exercise in fundamental business change, it falls squarely in the territory of board oversight."

Ashley Alder, Chair of the FCA

This toolkit has been produced in alignment with the Transition Plan Taskforce Disclosure Framework and Implementation Guidance. With thanks to:

Chronos Sustainability


Centre for Climate Engagement


LSEG (London Stock Exchange Group)


Continue to Part 2 of the Transition Planning Toolkit: Scorecard


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