July 13, 2022
Japanese Bankers Association
JBA Comments on “A Sector-Neutral Framework for private sector transition plans” by the Transition Plan Taskforce (TPT)
Questions

Comments

Questions on Section 1: Introduction to the TPT
1. Do you agree with the proposed definition of a transition plan? If not, why, and

We agree with the proposed definition of a transition plan and we also agree
that this definition may evolve as the work of the TPT develops.

what alternative definition would you suggest?
2. From your perspective, who are the key users of transition plans?

Transition plans are of interest to a wide range of stakeholders, including
customers, business counterparties, regulators, employees, investors, asset
owners and suppliers. Among them, we believe that fund providers who makeinvestments and provide financing, such as banks, investors and asset owners,
will be key users as the information is expected to be useful when making
decisions based on financial and non-financial information.

3. From your perspective, what are the key use cases for transition plans?

Fund providers are expected to confirm the sufficiency and feasibility of thetransition plan disclosed by companies in terms of its impact on corporate
value and business continuity, and use this information in their own investment
and financing decisions.

4. How should the TPT select which sectors to develop tailored transition planPriority should be given first to sectors with high carbon intensity (e.g., those

templates for? Following that logic, what financial sub-sectors and real economy

for which supplemental guidance is provided in the TCFD recommendations),

sectors should the TPT prioritise? In what order should these be addressed?

followed by financial institutions which are exposed to those sectors and areindirectly affected by transition risk.

5. Given the mandate set out in the TPT’s Terms of Reference, to what extent, and

We believe that in order to promote a just transition in the real economy, thehow, should the TPT consider issues beyond a firm’s contribution to an economy-

TPT should consider the form of corporate disclosures in order to contributewide decarbonisation?

to a just transition.

6. Which of these issues are a ‘must-have’ that need to be addressed in all transition

1QuestionsComments

plans, and which are ‘desirable’, which add depth or breadth but are not central toa transition plan?
7. Do you envisage any tensions between entity-level decarbonisation and

Entity-level decarbonisation is an ongoing concern that needs to be tailored toeconomy-wide decarbonisation goals? If so, can you provide examples and any

ensure the pace and plan result in the entity continuing. If entity-level

suggestions as to how the UK TPT may address these in its guidance?

decarbonisation is not set appropriately, it may have a negative impact on theeconomy as a whole. While this Framework is sector-neutral, the pace oftransition will vary by sector, and this should be fully considered with respect
to the usability and applicability of this Framework.
For example, it should be noted that if the decarbonisation of upstream sectorsof the supply chain (e.g. electricity, gas, steel, etc.) does not make progress,
the transition plan for the downstream sectors may not be achieved. In thisregard, we believe that clarifying the assumptions and exogenous variables ofthe metrics and targets set out in the transition plan would lead to an
appropriate assessment of the contribution of the companies concerned (evenif they fail to meet their targets). It would also be useful to develop a carbonbased input-output table based on the disclosed data to identify theinterrelationships of emissions across sectors.

8. What other financial or non-financial, mandatory or voluntary frameworks andWe believe that the framework and process presented in this Call for Evidence
is sufficient.

processes are you aware of that the TPT should consider as it proceeds?
Questions on Section 2: The Sector-Neutral Framework
9. Where would you prefer for companies to disclose information on their transition-plans? Please explain your reasoning, including on how the suggested location
relates to the intended audience.
10. How prescriptive should the Sector-Neutral Framework be, recognising the2

It is desirable for the framework to be principle-based, as pathways forQuestions

Comments

need to balance flexibility in how firms disclose transition plans with moretransition will vary from company to company. A principle-based approach isprescriptive templates that seek to facilitate comparability of firms’ transition

also appropriate from the perspective of the proportionality, as transition plans

plans?

can vary depending on the size and business model of a company. Theframework should be designed to be flexible, for example, introducing it instages, based on the process of standardising reduction targets and feasible
reduction measures included in the transition plan.
On the other hand, since clear, decisive and transparent disclosure is also
necessary, we believe that clear definitions are needed for valid comparisons.

11. Should the TPT seek to standardise the data and metrics used to communicate



From the perspective of comparability and internal controls, it is desirable thatambition and measure progress in transition plans? If so, what are the standards fordata and metrics related to the progress of transition plans should bedata and metrics that you would recommend including in the Sector-Neutral

standardised. This is beneficial for both the authors and users of transition

Framework and in supplementary sectoral guidance?

plans.
We believe that the metric is GHG emissions including Scope 3, but it should
be consistent with existing international measurement guidelines.

12. Question for small and medium-sized enterprises: what specific challenges do-you foresee for SMEs seeking to prepare or use transition plans? How can theguidance and framework prepared by the TPT address these concerns?
13. Question for preparers only: if your firm does not already disclose information

Industry practices, standards, and regulations in this area are new and evolvingof the type outlined in this Call for Evidence, what are the reasons for that? For

rapidly, and data availability is a challenge. Therefore, there is a risk that theexample, are there concerns about legal or possible market risks arising fromdisclosure of metrics and targets might be based on incomplete data. As noteddisclosure? How could the work planned by the TPT address these concerns?

in our response to Question 11, we believe that these risks can be minimised
if simple and comparable data and metrics are developed through the TPT'swork.

14. Transition plans provide an opportunity to ensure the benefits of the climate



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While there will be additional initial costs associated with learning andQuestions

Comments

transition are widely felt by UK households and consumers. How can the guidancedevelopment in order to build up a better understanding of climate

developed by the TPT balance the need to minimise costs whilst encouraging

considerations, over time, we believe these will become part of the broader

companies to develop strategies to maximise benefits for all?

industry knowledge base. For example, companies are expected to use datafrom ESG data providers to develop their own strategies, but additional costburdens and ensuring data reliability could be a challenge.

15. Do you agree with the principles proposed in the Call for Evidence? Why orWe agree with the proposed principles.

We believe that the proposed principles are sufficient.

We believe that Principle 1 is a ‘must-have’ and that Principle 2 and 3 are

why not?
16. Are there any principles that you would add to the list outlined in the Call forEvidence? Why?
17. Which of the principles outlined in the Call for Evidence would you regard as‘desirable’. In particular, in light of the recent trend towards statutory‘must-haves’ or as ‘desirable’?

disclosure of climate-related information, it is desirable that the governanceand verification process of the transition plan should be integrated within theinternal control framework for climate change risk management.
18. Principle 1 notes that a transition plan should cover the whole organisation.

-There may be challenges for internationally active firms in meeting Principle 1,
given that different jurisdictions will have different economy-wide transition
pathways.
How can the TPT design its standard and guidance in a way that accommodates
credible transition plans consistent with the broader strategy of a firm, but reflect
differences between approaches taken in different jurisdictions?
19. Do you agree with the elements proposed in the Call for Evidence? Why or why-not?
20. Are there any elements that you would add to the list proposed in the Call forEvidence? Why?

We believe that the list proposed in this Call for Evidence covers acomprehensive range of elements and that nothing more ought to be added.

21. Which of the elements outlined in the Call for Evidence would you regard as

4Of the elements listed, "a. Ambition" and "b. Target Setting" are ‘must-haves’Questions‘must-haves’ or as ‘desirable’ for credible transition plans?

Comments
In which instances

while the rest are ‘desirable’ or not particularly desirable. For example, it isshould an entity assess materiality to determine whether an element is considereddifficult to consider it desirable to require disclosure of "g. Engagement:

must-have and/or what level of disclosure detail is required?

Public sector" and "h. Engagement: Industry peers," which exceed therecommended level of the TCFD recommendations, because it is assumed that
there may be cases where the company has little to no influence, depending on
its sector and size.

22. Are there elements where you see substantial barriers to implementation? If so,

For elements that exceed the recommended level of the TCFD
recommendations, cost and timescale may be barriers to implementation.

which ones and why? Are you able to suggest alternatives which are both credible
and practical?
Further Feedback
23. Please share any other feedback or comments you may have on the work of theTPT and the Sector-Neutral Framework.

We welcome the TPT's efforts to develop frameworks, guidance, andtemplates to obtain appropriate data and to make clear and flexible pathways
towards net zero transparent and achievable.
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