A4S: Aligning financial planning and transition planning

The A4S guide offers seven practical steps to support the journey of aligning financial planning with transition planning. These steps are accompanied by examples, case studies, and tools to help finance and sustainability teams put ideas into practice. They provide a structured way for boards to oversee progress and ask the right questions of management.

• Step 1 – Prepare: Understand how financial planning needs to adapt to integrate transition planning, and build awareness of preparatory work already underway.
• Step 2 – Understand Position: Conduct a gap analysis to understand organisation's emissions and identify the gaps between transition and financial planning, identify what matters most for financial planning, estimate costs and savings, and consider cross-sector and value chain impacts.
• Step 3 – Prioritise: Rank actions based on feasibility, risks, costs and benefits, and emissions reduction potential, and allocate them across short-, medium-, and long-term horizons.
• Step 4 – Embed: Integrate transition planning into the organisation's three-to-five-year financial planning process, aligning with business units and supporting them to act consistently with the strategic transition plan.
• Step 5 – Consider Financing: Explore financing options, understand opportunities for shared costs and benefits, and assess whether direct financial support to the value chain is appropriate.
• Step 6 – Improve Decision-Making: Enhance decision-making by factoring in emissions reductions, resilience, lifetime costs, and broader impacts on people and nature alongside financial outcomes.
• Step 7 – Monitor, Analyse, Report: Align data and systems to track performance, ensure management information supports delivery, and report progress externally to drive accountability and collaboration.

The guide also includes two practical tools to support implementation. Tool 1 – Financial Planning Checklist is a starting framework to identify the internal information required to bring financial and transition planning together, highlighting key considerations to guide the process. Tool 2 – Liaising with Business Units clarifies what transition planning means at the business-unit level and outline the information needed to support more detailed, granular planning.