Background information about the Transition Plan Taskforce.

Developing a gold standard

Effective transition finance is dependent on credible transition plans. To contribute to the work of the new Transition Finance Market Review, the mandate of the Transition Plan Taskforce (TPT) was extended to 31 July 2024, with the possibility of a further 3-month extension.

The TPT was announced at COP26 in Glasgow and launched in April 2022 to establish the gold standard for transition plans. The TPT has engaged globally with financial institutions, real economy corporates, policymakers, regulators and civil society to develop its materials. 

As part of its original two-year mandate the TPT has delivered:

This progress has been accompanied by international engagement that is informing approaches and new regulatory requirements in a number of jurisdictions, and through multilateral processes. This includes with the Financial Stability Board, IOSCO and the NGFS, as well as the G7, G20, UNFCCC and the Coalition of Finance Ministers for Climate Action.

Supporting global norms on transition plan disclosures

There is substantial international interest in the TPT’s work. The TPT Secretariat has engaged with many jurisdictions on transition plans to inform their own approaches including Australia, Brazil, Ghana, European Union, France, Germany, Hong Kong, Japan, Malaysia, New Zealand, Singapore, Thailand, the United Kingdom, and the United States. The TPT is also engaging with many multilateral groupings of central banks, supervisors and regulators considering transition plans including the Financial Stability Board, IOSCO, NGFS, the Basel Committee on Banking Supervision, the Coalition of Finance Ministers for Climate Action, as well as ongoing multilateral processes such as the G7, G20 and the UNFCCC.

Many countries are also expected to adopt the International Sustainability Standards Board (ISSB) global baseline which recommends the disclosure of transition plans.

These key principles to ensure international alignment were core to the TPT’s work:

  • The TPT Framework is designed to be consistent with, and build on, the final climate-related disclosure standard (IFRS S2) issued by the ISSB. IFRS S2 includes several provisions that are relevant to transition planning, including the requirement that an entity disclose information about any climate-related transition plan it has. The TPT Framework provides a set of Disclosure Recommendations that an entity can use as guidance on how to report more effectively on the transition plan-related aspects of IFRS S2, as part of wider sustainability-related disclosures in its general purpose financial reports.

  • In addition to these efforts to ensure alignment and integration with the ISSB Standards, the TPT Framework also draws on GFANZ’s framework and guidance for credible, comprehensive and comparable net zero transition planning and uses the same core components and structure.

  • This means that the TPT Framework and GFANZ are both part of an aligned, consistent effort to support the development of private sector transition plans.
  • The TPT aims for the Disclosure Framework to inform the development and convergence of transition plan disclosures in other jurisdictions. To that end, the TPT is engaging with the FSB, NGFS, IOSCO, ISSB, other relevant multilateral organisations and financial regulators in other jurisdictions. The TPT is also engaging with other countries that are developing disclosure and transition plan frameworks. 

Informing future UK regulation

The TPT is informing future transition plan requirements in the UK as part of the broader Sustainability Disclosure Requirements framework.  

  • In October 2021, the UK Government published the Greening Finance Roadmap, committing to take action to help align UK financial flows with a net zero economy.

  • At COP26 in November 2021, the Chancellor announced the establishment of the TPT as part of the UK’s plans to become the world’s first net zero financial centre, ensuring financial flows shift towards supporting net zero. The UK committed to move towards making publication of transition plans mandatory.

  • From December 2021, the FCA introduced climate-related disclosure requirements aligned with the TCFD’s recommendations. Transition plan disclosures are provided for in the Financial Conduct Authority’s (FCA) rules. Listed issuers are required to make TCFD-aligned disclosures on a comply or explain basis. In doing this, issuers are expected to carry out a detailed assessment of the TCFD’s all-sector guidance, which includes that entities should describe their plans for transitioning to a low carbon economy. Similarly, FCA-regulated asset managers and owners are required to make TCFD aligned disclosures and take reasonable steps to ensure these disclosures are consistent with the TCFD’s all-sector guidance.

  • FCA guidance also encourages listed companies, asset managers and asset owners that are headquartered in, or operating in, a country that has made a commitment to a net zero economy to consider the extent to which they have considered that commitment in developing and disclosing their transition plans.

  • In March 2023, in the 2023 Green Finance Strategy, the UK government also committed to consulting on introducing transition plan requirements for the UK’s largest listed and private companies, following the release of the TPT’s final Disclosure Framework which was published in October 2023. The government also reinforced its support for the International Sustainability Standards Board (ISSB) and is considering the final ISSB Standards for use in the UK.
  • In August 2023, the FCA announced it will consult on expectations for listed companies’ transition plan disclosures. The FCA will consult on introducing disclosure requirements aligned with the TPT Framework within the FCA Handbook at the same time as the UK-endorsed ISSB standards, explicitly recognising the relationship between the two frameworks.