4.3 An entity shall disclose information about the GHG emissions and removals metrics and targets that it uses in order to drive and monitor progress towards the Strategic Ambition of its transition plan, and report against these metrics and targets on at least an annual basis.

As part of this, an entity:

a. shall disclose information about any targets for reducing absolute gross GHG emissions for Scopes 1 and 2 that it has set

b. shall disclose information about any targets for reducing absolute gross GHG emissions for Scope 3 that it has set

c. shall disclose information about any additional GHG emissions targets that it has set (e.g. methane reduction targets)

d. shall disclose information about how the targets disclosed under 4.3.a–c reflect the Strategic Ambition of its transition plan, and how they relate to the actions outlined under 2. Implementation Strategy and 3. Engagement Strategy.

e. may disclose information about any gross GHG emissions intensity targets expressed as metric tonnes of CO2 equivalent per unit of physical or economic output for Scopes 1 and 2

f. may disclose gross GHG emissions intensity targets expressed as metric tonnes of CO2 equivalent per unit of physical or economic output for Scope 3

g. may disclose any targets for increasing GHG removals from activities such as land use, land use change, bioenergy and carbon removal technologies 

h. shall disclose the categories of Scope 3 GHG emissions included within the target disclosed under 4.3.b. and, where it has excluded categories of Scope 3 GHG emissions from its targets, disclose the reason for omitting them, and any steps it is taking to improve monitoring and reporting systems.

i. shall, for each target disclosed under 4.3.a-c, disclose:

i. the metric used to set the target

ii. the objective of the target

iii. the part of the entity or its activities to which this target applies

iv. the period over which the target applies

v. the base period and value from which progress is measured

vi. any milestones or interim targets

vii. if the target is quantitative, whether it is an absolute or an intensity target

viii. how the latest international agreement on climate change, including any jurisdictional commitments that arise from that agreement, has informed the target

ix. whether and how the target aligns with any pathways disclosed under 1.1.c including, where possible, the expected trajectory of how this target will be achieved

j. shall disclose information about its approach to setting and reviewing each target disclosed under 4.3.a-c, and how it monitors progress against each target, including:

i. whether the target and the methodology for setting the target have been validated by a third party

ii. the entity’s processes for reviewing the target

iii. the metrics used to monitor progress towards meeting the target

k. shall report against metrics used to assess progress towards the targets disclosed under 4.3.a-c at least on an annual basis; this shall include:

i. information about its performance against each target

ii. an analysis of trends or changes in the entity’s performance

iii. whether and to what extent (if known) measurements rely on estimated data,

iv. any revisions to the target and explanation for those revisions

l. shall in disclosing information on GHG emissions under 4.3.k,

i. disclose its absolute gross GHG emissions generated during the reporting period, expressed as metric tonnes of CO2 equivalent, classified as Scope 1, 2 and 3 GHG emissions

ii. measure its GHG emissions in accordance with The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (2004) unless required by a jurisdictional authority or an exchange on which the entity is listed to use a different method for measuring its GHG emissions

iii. disclose the approach it uses to measure its GHG emissions under 4.3.l.i including

1. 1. 1. the measurement approach, inputs and assumptions the entity uses to measure its GHG emissions
      2. the reason why the entity has chosen the measurement approach, inputs and assumptions it uses to measure its GHG emissions
      3. any changes the entity made to the measurement approach, inputs and assumptions during the reporting period and the reasons for those changes

iv. for Scope 1 and Scope 2 GHG emissions disclosed under 4.3.l.i, disaggregate emissions between

1. 1. 1. the consolidated accounting group (e.g. parent and its consolidated subsidiaries)
      2. other entities excluded from the consolidated accounting group (e.g. associates, joint ventures and unconsolidated subsidiaries).

v. for Scope 2 GHG emissions disclosed under 4.3.l.i, disclose its location-based Scope 2 GHG emissions and provide information about any contractual instruments that is necessary to inform users’ understanding of the entity’s Scope 2 GHG emissions

vi. for Scope 3 GHG emissions disclosed under 4.3.l.i, disclose:

1. 1. 1. the categories included within the entity’s measure of Scope 3 GHG emissions, in accordance with the Scope 3 categories described in the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2011) and, where it has excluded categories of Scope 3 GHG emissions, disclose the reason for omitting them, and any steps it is taking to improve monitoring and reporting systems to enable reporting
      2. additional information about the entity’s Category 15 GHG emissions or those associated with its investments (financed emissions) if the entity’s activities include asset management, commercial banking or insurance

m. may, where relevant, further disclose information about GHG removals from activities such as land use, land use change, bioenergy and carbon removal technologies; this shall:

i. be separately identifiable from information about GHG emissions disclosed under 4.3.l.i and information about carbon credits disclosed under 4.4 Carbon credits

ii. include information about which third-party scheme(s) has or will verify or certify the removals

iii. include information about which standard the removals have been or will be certified against

iv. disclose whether and how the entity identifies and manages the impacts and dependencies of removals on its stakeholders, society, the economy, and the natural environment throughout its value chain, that may give rise to sustainability-related risks and opportunities (for example, this may include an assessment and mitigation of social risks of removals usage (e.g. through human rights impact assessments)).

Metrics and targets on GHG emissions are likely to be a crucial cornerstone of an entity’s transition plan. For users, information on GHG emissions is therefore fundamentally important to their understanding of an entity’s transition plan.

To understand whether an entity is appropriately monitoring the outcomes of its implementation and engagement strategy, a user will need information about any GHG targets the entity has set as well as their GHG emissions. The value of these disclosures will be strengthened if entities disclose information on GHG emissions in a consistent and comparable manner, leveraging authoritative guidance provided by the Greenhouse Gas Protocol, unless otherwise required by a jurisdictional authority or an exchange on which the entity is listed.

In order to disclose effectively in accordance with 4.3 an entity may wish to consider the following:

For further guidance on reporting information about greenhouse gas emissions targets (4.3.a-c, 4.3.e-i), an entity may find it helpful to refer to the Application Guidance provided in the IFRS S2 Climate-related disclosures (see B68-9).

For further guidance on reporting information about greenhouse gas emissions (4.3 l), an entity may find it helpful to refer to the Application Guidance provided in the IFRS S2 Climate-related disclosures  (see B19 – 63).

The guidance on accounting for CO₂ removals (4.3.g & 4.3.m) is still evolving. Where entities reports metrics and targets related to GHG removals, the TPT recommends that they follow the [draft] guidance for Greenhouse Gas Protocol Land Sector and Removals Guidance and the recommendations of the SBTi’s Forest, Land and Agriculture Guidance. For the avoidance of doubt, metrics on CO₂ removals and storage shall be clearly separated from targets on GHG emissions and carbon credits. The entity shall further disclose whether any removals have been certified or verified by a third party and, if so, by whom and against which standard.

Public Disclosure Examples

Please note: Transition planning is an emerging space in which current practice is rapidly evolving. The selected examples should not be regarded as an articulation of “best practice”. Instead, they are intended to illustrate the type of information an entity may want to include under a particular Sub-Element to support interpretation of the framework by preparers. It is important to note that selected examples will often not cover the entirety of TPT Recommendations, and may sometime contain information which is relevant to several Sub-Elements. Readers should note that some examples are taken from transition plan-related content in entities’ wider climate-related disclosures, as well as content in standalone transition plans.

Example 1:

Example of how a bank disclosed information relevant to 4.3.b and 4.3.f: 

Source: Lloyds Banking Group plc, Environmental Sustainability Report, p.28, (2022)

Example 2:

Example of how a financial services entity has disclosed information relevant to 4.3b:

Source: L&G plc, Climate Transition Plan, p.33, (2022) 

Example 3:

Example of how a bank has disclosed information relevant to 4.3b and 4.2.i.ix:

Source: Barclays plc, Annual Report, p.88, (2022)