1

Disclosure
Framework
OCTOBER 2023

Transition Plan Taskforce

2

Transition Plan Taskforce

Foreword by the TPT SteeringGroup Co-Chairs
At COP26, the UK government announced its intention to become the world’s first net-zero aligned Financial
Centre and announced that it would launch the Transition Plan Taskforce (TPT) with the mission to produce
a gold standard Disclosure Framework for transition plans. Less than two years later, the TPT has deliveredon this mission, with the launch of the Disclosure Framework and Implementation Guidance.

This framework has been a truly collaborative effort drawing from the wide range of talent and expertise
across the market. It wouldn’t have been possible without the over 100 organisations across finance,business, civil society, government, and academia which have supported its development and the over 500
organisations we engaged with to test its robustness.

The UK is committed to global net zero leadership, which is why the government is moving towards making
publication of transition plans mandatory. Following the release of the TPT Framework, regulators willdraw from it to strengthen existing requirements. The Government will also consult on the introduction ofrequirements for the UK’s largest companies to disclose their transition plans if they have them.

Even as the regulatory framework for transition plans develops, their disclosure must not be viewed bybusinesses as merely a compliance exercise. Transition plans form a critical component of a firm’s businessstrategy – helping to explain to their customers, shareholders and investors how they will adapt and growas the global economy transitions to net zero.

Transition plans are not just becoming the norm in the UK, but building momentum internationally, whether
that be in the US, EU, G7, or G20. The International Sustainability Standards Board’s (ISSB) Standards (IFRS
S1 and S2) – which are forming the global baseline for sustainability-related financial disclosure – also
expect disclosure of transition plans. The TPT builds on the work of the ISSB and supports compliancewith IFRS S2. The Disclosure Framework is also aligned with the transition plan guidance developed by the

Glasgow Finance Alliance for Net Zero (GFANZ), and so supports international convergence on what makes
a transition plan robust and credible. So, while the

TPT framework has been developed in the UK, it has
global applicability by design.

Over the coming decades the world will undergo
one of the biggest economic transformations inliving memory. Businesses which manage the risks
and seize the opportunities that transformation

presents will flourish. That requires a transition plan.
The TPT framework provides the tools businesses
need to get going, so our message is simple: it’stime to turn ambition into action.

Amanda Blanc, GroupCEO Aviva Plc, Co-Chair,
Transition Plan Taskforce

Cover image Matheo, Unsplash,com

Baroness Penn, Treasury
Lords Minister, Co-Chair,
Transition Plan Taskforce

3

Transition Plan Taskforce

Foreword from Sue Lloyd, ViceChair, International Sustainability
Standards Board (ISSB)As the extreme weather witnessed around the world has shown, climate change is increasingly having avery real impact on companies and capital. As a result, we know that companies have taken the decision– or are being asked – to develop plans to transition to be more climate-resilient including through lowercarbon business models. For these companies, the publication of the Transition Plan Taskforce Disclosure

Framework will be welcomed as both timely and important, helping them develop and disclose targets andaction plans.

In June 2023, the International Sustainability Standards Board (ISSB) issued its first sustainability disclosureStandards-IFRS S1 and IFRS S2-in response to market demand for a global language of sustainability-related
disclosures aimed at meeting investor information needs.

The ISSB addresses disclosure requirements so does not require companies to put transition plans in place.

However, the ISSB’s climate-related Standard-IFRS S2-requires companies to disclose information about any
climate-related transition plans a company has, including key assumptions used in developing these plans
and the dependencies on which the plan relies.

This means that the TPT Framework provides a practical and useful complement
to our Standards. It will be a useful tool for companies in developing theirtransition plans and informing the disclosure requirements in IFRS S2.

We welcome steps taken by the Transition Plan Taskforce to ensure this framework
is consistent with the ISSB Standards and the Taskforce’s strong support for thevision of a global baseline of climate-related disclosures, which will provide muchneeded consistency and comparability for investors and enable companies tocommunicate with existing and potential investors.

We look forward to continued cooperation as we help companies around theworld benefit from robust climate-related disclosures.

4Transition Plan Taskforce

Foreword from Mary Schapiro,Vice-Chair, Glasgow Financial
Alliance for Net Zero (GFANZ)
Recognising the risks and opportunities of net-zero transition, thousands of companies have madevoluntary net-zero commitments. To implement these, firms need strategic transition plans laying out thesteps they will each independently take to align their core business with a net-zero future. In doing so, it iscritical that firms develop plans that are credible, comprehensive, and consistent.

I applaud the leadership UK financial policymakers and private sector leaders have shown in delivering theTransition Plan Taskforce Disclosure Framework. Implementation of the TPT Disclosure Framework in the UK-

and the shift from voluntary to mandatory disclosures-will play an essential role in catalysing the systemicchange needed to finance the transition to a net-zero economy.

For GFANZ, 2023 is the year of the transition plan. As an increasing number of financial institutions voluntarily
prepare and disclose transition plans, GFANZ is working with policymakers globally to advance consistent
approaches to transition planning, drawing on the voluntary GFANZ framework.

It is by design that the TPT Disclosure Framework identifies the same key components of a credible,

comprehensive, and consistent transition plan as GFANZ, and that the TPT’s sectoral guidance for financial
sub-sectors aligns with the existing voluntary guidance from the GFANZ net-zero
sector-specific alliances.

It is encouraging that policymakers in a growing number of jurisdictions arerecognising the importance of transition plans. Net-zero transition is a common
global challenge being addressed by jurisdictions that rely on global finance,companies with global supply chains, and financial institutions that can channel
finance cross-border to deliver the greatest decarbonisation impact.

The need for global convergence on what constitutes credible, comprehensive,and consistent transition planning disclosures could not be greater. We lookforward to working with a broadening set of policymakers to deliver thisconsistency, and thank the UK public and private sectors for leading the way.

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Transition Plan Taskforce

Acknowledgements
The drafting of this Disclosure Framework was led by the Disclosure Framework Workstream (theWorkstream) of the TPT Delivery Group, with input from the wider Delivery Group and Steering Group, the TPT
Working Groups on nature, adaptation and just transition, and support from the TPT Secretariat.
The TPT would like to thank•the Co-Chairs of the Workstream: Mark Manning (FCA) and Matt Scott (UK Centre for Greening Finance &•the Co-Chairs of the Adaptation Working Group: Faith Ward (IIGCC and Brunel Pension Partnership) and•the Co-Chairs of the Just Transition Working Group: Bella Landymore (Impact Investing Institute), Nick

Investment);

Katie Spooner (Environment Agency);

Robins (Grantham Research Institute, London School of Economics), and Brendan Curran (Grantham
Research Institute, London School of Economics);•

the Co-Chairs of the Nature Working Group: Ed Steeds (WWF) and Nitika Agarwal (WWF)alongside other members of the Delivery Group and and the Disclosure Framework Workstream,
and their teams:

Rachel Solomon Williams,
Aldersgate Group

Patrick Arber, Aviva
Richard Manley, Canada Pension
Plan Investment Board

Helen Wildsmith, CCLA
Nicolette Bartlett andScott Twigg, CDP

Julie Baddeley, Chapter Zero,

Co-Chair of TPT Sector GuidanceWorkstream

Adam Matthews, Church of
England Pensions Board

Chris Stark, Climate Change
Committee

James Vaccaro, Climate Safe
Lending Nework

Harriet Cullum, Diageo
Curtis Ravenel, Glasgow Financial
Alliance for Net Zero

Ingrid Holmes, Green FinanceInstitute

Kim Wilkinson, HM Treasury
Richard Spencer, Institute ofChartered Accountants ofEngland and Wales

Faith Ward, Institutional Investors

Alexander Nick, World Business

Brunel Pension Partnership

Development

Group on Climate Change andPaul Scaping, Investment
Association

Caroline Clark-Maxwell,International Sustainability
Standards Board

Clara Barby and Spencer Powell,
Just Climate

Toby MacKean, Legal & General
Investment Management

David Harris, London Stock
Exchange Group,

Co-Chair of TPT Sector GuidanceWorkstream

James Close, NatWest
Katharina Lindmeier, National
Employment Savings Trust

Richard Crossick, Ørsted UK
Bruno Gardiner, Phoenix Group
Chandra Gopinathan, RailPen
Catherine Howarth, ShareAction
Rachel McEwen, SSE
Thomas Lingard, UnileverCouncil on Sustainable

Hannah Summers, WTW
Tony Rooke
Vanessa Havard-Williams
Tim Rawlings, Bank of England(Observer)

Amy Jenkins, Department forEnergy Security and Net Zero
(Observer)

Helen Edmundson, Department
for Environment, Food & Rural
Affairs (Observer)

Des Healey, Department for Workand Pensions (Observer)

Mark Babington and Elisa Noble,
Financial Reporting Council(Observer)

Mark Hill, The Pensions Regulator(Observer)

Mark Anderson, UK Export
Finance (Observer)

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Transition Plan Taskforce

The TPT would also like to thank current and former members of the TPT Secretariat for their work on the
Disclosure Framework and the wider TPT work programme:
Dr Ben Caldecott (Co-Head, TPT Secretariat)

Max Rose

Kate Levick (Co-Head, TPT Secretariat)

Alexander Schlatter

Jacques Morris (Team Leader, TPT Secretariat)

Gireesh Shrimali

Ira Poensgen (Technical Lead, TPT Secretariat)

Fadli Amin

Nathan Chan

Abigail Bernabe

Helen Civil

Riona Bowhay

Ben Gilbey

Camila Cristancho Duarte

Saad Moazam

Sophie English

Nina Pimblett

Jun Imai

José Luis Reséndiz

William Richards

Kate Ryan

Jojo Rouse

Photo Matthew Smith, Unsplash.com

7Transition Plan Taskforce

CONTENTS
1 Introduction											102 Defining a Good Practice Transition Plan						

153 Building Capacity and Supporting Good Practice				20

4 The TPT Disclosure Framework							

21Appendix 1: Reporting of Transition Plans						

38Glossary 											

43The materials produced by the TPT reflect a synthesis of best practice at the time of publication. They do not constitutefinancial, legal, or other professional advice and should not be relied upon as such. Nothing in the Disclosure Framework

is intended to override, substitute, or alter existing legal or regulatory requirements, including, without limitation, duties ofthe entity’s directors and senior managers, and the entity’s constitutional documents. Nothing in this Disclosure Framework
should be understood to require the disclosure of commercially sensitive information.

Photo Lerone Pieters, Unsplash.com

Photo United States Geological Survey (USGS), Unsplash.com

9Transition Plan Taskforce

About the TPTThe UK has set itself ambitious and legallyIn the 2023 Green Finance Strategy, theemissions to net zero by 2050, with binding

introducing requirements for the UK’s largest

binding targets to cut greenhouse gas (GHG)
interim targets. The UK has also pledged at UN
climate negotiations to cut emissions by atleast 68% by 2030.1

In October 2021, the UK government publishedthe Greening Finance Roadmap, signallingthat it intends to strengthen new and existingsustainability reporting requirements forcompanies, including publication of climate

UK government committed to consult oncompanies to disclose their transition plans
if they have them.2 In addition, the Financial
Conduct Authority (FCA) has signalled

its intention to consult on strengthening

requirements for transition plan disclosuresin line with the TPT Disclosure Framework,

alongside its consultation on implementing
UK-endorsed ISSB Standards.3

transition plans.

At COP26, the UK Chancellor further committed

to work towards the UK becoming the world’s first
Net Zero-aligned Financial Centre and ensuringthat financial flows shift towards supportinga net zero economy. The Chancellor also set
out that the UK will move towards making

publication of transition plans mandatory.
The Transition Plan Taskforce (TPT) was launched
by HM Treasury in March 2022 with a mandate tobring together leaders from industry, academia,
and regulators to develop good practice fortransition plan disclosures for finance and thereal economy. In addition, the TPT has beentasked to engage with non-UK governments andregulatory networks to support conversations on
how to build common baselines and principles
for transition planning.

The Transition Plan
Taskforce (TPT) was
launched by HM Treasury
in March 2022 with amandate to bring together
leaders from industry,
academia, and regulators
to develop good practicefor transition plan
disclosures for financeand the real economy.

1) See UK Climate Change Act 2008 and the UK’s Nationally Determined Contribution, as updated September 2022
2) UK government, Mobilising green investment: 2023 green finance strategy April 2023
3) FCA, Primary Market Bulletin 45, August 2023

10Transition Plan Taskforce

1. INTRODUCTION
The 195 Parties to the Paris Agreement have jointly committed to pursue efforts to limit global warming

to 1.5ºC above pre-industrial levels, while also adapting to the adverse impacts of climate change andfostering resilience.4 More recently, in 2022, the 196 parties to the Convention on Biological Diversity agreed

to a historic package of goals and targets to restore natural ecosystems and halt the dangerous loss of
biodiversity.5

Both agreements recognise the need to pursue their goals in a manner that respects the imperative ofa just transition and that meets the needs of people everywhere.

The global community is not yet on track to meet these environmental goals.6 Recent devastating floods,

storms, wildfires, and heatwaves across the world demonstrate clearly that we are not resilient to today’s
climate. Current emissions trends mean that these impacts will continue to accelerate.

The world urgently needs to make an orderly transition to a low-greenhouse gas (GHG) and climate-resilient economy. One that captures opportunities, while safeguarding the natural environment. And onethat is as fair and inclusive as possible to everyone, creating decent work opportunities and leaving noone behind.7

To meet this challenge a fundamental transformation in business and finance is required.

The role of transition planning and transition plans
Transition planning and the disclosure of transition plans are core to this transformation. A robust

approach to transition planning provides a blueprint for strategic delivery. Disclosure of transition plans
can equip investors with the information they need to finance the transition at the speed and scalerequired.

Many of the building blocks for financing the transition are already in place. Across the globe companies
are increasingly committing to ambitious climate targets. For instance, over 8,300 companies and over

550 financial institutions have signed up to the UN’s non-state actor initiative. Voluntary initiatives, such as
the Glasgow Financial Alliance for Net Zero (GFANZ), are turning commitments into climate action, and thefirst wave of private sector transition plans are being disclosed.

The TPT Disclosure Framework (the “Framework”) sets out good practice for robust and credible transition
plan disclosures.

To meet this challenge a fundamental
transformation in business and financeis required.
4) UNFCCC, Paris Agreement, 2015.
5) CBD, Kunming-Montreal Global Biodiversity Framework, 2022.
6) IPCC. Synthesis Report of the IPCC Sixth Assessment Report (AR 6), 2023. UNEP. Too little too slow – Adaptation Gap Report, 2022. IPBES, Global assessment
report on biodiversity and ecosystem services of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services, 2019.
7) ILO, Frequently Asked Questions on just transition, 2023
8) UNFCCC, Race to Zero Campaign 2022
9) GFANZ, 2022 Progress Report, 2022

11Transition Plan Taskforce

One plan, many users
An entity’s transition plan can serve many purposes. Disclosing a transition plan as part of sustainability-

related disclosures in general purpose financial reports, connected with the entity’s financial statements, will:• S et a blueprint for actions within the reportingtransition is sufficient given its exposure to climate-coordinated, purposeful actions, and support

transition-related claims to clients and consumers

entity enabling it to direct strategy, promote
a whole-of-organisation transformation.

• Improve the information available to investors

and lenders, enabling them to price risk and makecapital allocation decisions.

• S upport policymakers and regulatory authorities
to understand the trajectory of the economy-

wide transition and how this both influences, andis influenced by, climate policy in order to informfuture policymaking.

• P articularly in the case of financial services firms,
allow supervisors and regulators to assess

whether an entity’s strategy for managing the

Photo Jose Martin Ramirez Carrasco, Unsplash.com

related risks and opportunities, and whether its
are well founded.

• Help stakeholders hold entities to to account for
their public climate commitments.

• Act as a reference point for financial instruments
and products directed towards financing theclimate transition, helping the markets for climate
and transition finance instruments to scale withintegrity.

• Provide forward-looking strategic information to thewider capital markets ecosystem, including dataservices, credit ratings, and other tools, to support
the mainstreaming of sustainability in finance.

12

Transition Plan Taskforce

International alignment
Transition planning, and transition plans, are becoming important considerations for central banks,
supervisors, standard setting bodies, and other international organisations.10
The TPT Framework is designed to be consistent

may wish to consider as a source of additional

Disclosures standard (IFRS S2 ) issued by theelaborated in the TPT – ISSB Technical Mapping.13

with, and build on, the final Climate-Related
11International Sustainability Standards Board(ISSB). IFRS S2 includes several provisions thatare relevant to transition planning (including therequirement in paragraph 14(a)(iv) that an entity
disclose information about any climate-relatedtransition plan [it] has). The TPT Framework provides
a set of Disclosure Recommendations that an

guidance when making its disclosures. This is further
Appendix 1 also notes that it would be good practicefor entities periodically to draw transition plan

disclosures into a standalone report, in which they

may consider including additional content that may
not be material to primary users of general purpose
financial reports.

entity can use as guidance on how to report more

In addition to these efforts to ensure alignmentof IFRS S2, as part of wider sustainability-related

Framework also draws on GFANZ’s framework

Following the TPT’s Disclosure Recommendations

comparable net zero transition planning and uses

decision-useful reporting on transition plans acrossmeans that the TPT Framework and GFANZ are both

effectively on the transition plan-related aspects

and integration with the ISSB Standards, the TPT

disclosures in its general purpose financial reports.

and guidance for credible, comprehensive, andshould encourage more complete, structured, andthe same core components and structure. This

the economy.

part of an aligned, consistent effort to support the

To ensure that the TPT Framework can be applied
effectively in this way, it leverages the ISSB’s

definition of a climate-related transition plan, andapplies the same approach to materiality and thedevelopment of private sector transition plans. See
Figures 1 and 2 which set out the Transition Plan

Disclosures Landscape and how preparers can use
the outputs of ISSB, GFANZ, and TPT.

wider set of concepts and definitions that are set
out in the ISSB’s General Requirements standard(IFRS S112). Table 2: IFRS S1 Corporate Reporting Norms
signposts corporate reporting norms from IFRS S1
to aid preparers on how to interpret them whenreviewing TPT (see Appendix 1).

Appendix 1 elaborates on reporting expectations.
In particular, Table 1 on p40, sets out the main
provisions in IFRS S2 that contain disclosure

requirements relevant to transition planning and,for each of these provisions, identifies the TPT
Disclosure Recommendations that an entity

The TPT Framework is
designed to be consistent
with, and build on, the final
climate-related disclosureStandard issued by the ISSB.

10) For example, see NGFS, Stocktake on Financial Institutions’ Transition Plans and their Relevance to Micro-prudential Authorities, May 2023.
G20 Sustainable Finance Report, 2022, principle 13.
11) FRS S2, Climate-related Disclosures, 2023.
12) IFRS S1, General Requirements for Disclosure of Sustainability-related Financial Information, 2023.
13) In addition, the TPT has provided technical mapping documents to the TCFD’s Recommendation and Guidance and comparison to the European
Sustainability Reporting Standards (ESRS), as adopted by the European Commission under the Corporate Sustainability Reporting Directive (CSRD) (see here)13

Transition Plan Taskforce

Figure 1: The Transition Plan Disclosures Landscape

The Transition
Plan Disclosures
LandscapeFurther depth& detail for
preparers &users

The ISSB’s inaugural sustainability

The TPT has developed a sector-

GFANZ has delivered a globallyand IFRS S2 – will serve as thefor best-practice transition

institutions and (2) real-economy

disclosure Standards – IFRS S1

global baseline of sustainability
disclosure for capital markets.
IFRS S2 requires an entity toneutral Disclosure Framework
plan disclosures, alongside

implementation guidance andsector guidance.

make disclosures that relate to

The TPT Disclosure Framework

requirement in IFRS S2 par. 14(a)voluntary and mandatory use

transition planning – including thethat an entity disclose information
about “any climate-relatedtransition plan [it] has”.

IFRS S2 establishes disclosure

requirements. Entities can benefit
from guidance on what a goodpractice climate transition planshould cover and complementarydetailed guidance on disclosures.

is designed to be available forinternationally, purposefully
supporting regulatory

implementation in a mannerconsistent approach to (1) financialtransition planning, identifying the

key elements a transition plan needs
to be credible and comprehensive,
as well as tools to support thedevelopment, creation andimplementation of a company’s net

zero transition plan. It has a focus on

financial industry alignment with net
zero across all financial sectors.

consistent with reporting under ISSBThe GFANZ framework builds on

net zero or other climate ambition. It

existing transition plan guidanceStandards and accommodating acomplements, and builds on, IFRS S1and S2.

The Disclosure Framework draws on

the components identified by GFANZ
of a good transition plan, ensuring
the outputs of both initiatives lock
together to form an integrated

approach to transition planning.

and consolidates across relevantfrom a range of technical bodies.

For example: CDP for data collection,
Science Based Targets for a targetsetting methodology, and CA100+ /TPI for transition plan assessment,
as well as the commitments andguidance of the net-zero financealliances, and the relevant broader
recommendations of the UN HighLevel Expert Group.

14

Transition Plan Taskforce

Figure 2: The Transition Plan Disclosures Landscape: how preparers can use the outputs of ISSB, GFANZ, and TPT

The Transition Plan Disclosures Landscape:how preparers can use the outputs of ISSB, GFANZ, and TPT
IFRS FOUNDATIONIASBFurther depth& detail for
preparers &users

IS S BI F R S S1 G enera l R eq ui rements for D i s c l os ures of
S us ta i na b i l i ty- rel a ted F i na nc i a l I nforma ti on
I FR S S 2 C l i ma te- rel a ted D i s c l os ures

GFANZ Real-economy
Transition Plans Guidance

GFANZ Financial Institution
Transition Plans Guidance

TPT Disclosure Framework
TPT suite of Implementation Guidance
TPT Sector Summary (40 sectors)
Real economy sectors*

Finance sub-sectors*

TPT Electric Utilities & Power
Generators Guidance

TPT Banking
Guidance

TPT Food & Beverage
Guidance

TPT Asset Owner
Guidance

TPT Metals & Mining
Guidance

TPT Asset Manager
Guidance

TPT Oil & Gas
Guidance*This TPT Deep Dive guidance is to be published for consultation in November 2023

15Transition Plan Taskforce

2. DEFINING A GOOD PRACTICE TRANSITION PLAN
2.1 TRANSITION PLAN DEFINITION
The IFRS S2 Standard defines a climate-related transition plan as follows:“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.”

The TPT builds from this definition, recommending that a good practice transition plan clearly articulates

the entity’s Strategic Ambition. This comprises its objectives and priorities for responding and contributing
to the transition towards a low GHG-emissions, climate-resilient economy. It also sets out whether andhow the entity is pursuing these objectives and priorities in a manner that captures opportunities, avoids
adverse impacts for stakeholders and society, and safeguards the natural environment.

Elaborating the entity’s strategic approach to supporting an economy-wide transition, while managing

the risks and opportunities that arise from its impacts and dependencies, will provide users with valuable
information on how it is protecting and enhancing long-term value.

To drive good practice, the TPT Framework applies three guiding principles of Ambition, Action andAccountability. The Framework is organised across five Elements, as shown in Figure 3, which areconsistent with the transition planning components proposed by GFANZ in its guidance.

!"#$$%&'($#)%*+%,"$%-#'.$/*#0%123',$3%4565764548
PRINCIPLES

Ambition

DISCLOSURE
ELEMENTS

1. Foundations

2. Implementation
Strategy

3. Engagement Strategy

4. Metrics & Targets

5. Governance

1.1 Strategic Ambition

2.1 Business operations

3.1 Engagement with value
chain

4.1 Governance, engagement,
business and operational
metrics and targets

5.1 Board oversight andreporting

1.2 Business model and valuechain

2.2 Products and services

3.2 Engagement with industry

4.2 Financial metrics andtargets

5.2 Management roles,
responsibility andaccountability

1.3 Key assumptions andexternal factors

2.3 Policies and conditions

3.3 Engagement withgovernment, public sector,
communities, and civil society

4.3 GHG metrics and targets

5.3 Culture

4.4 Carbon credits

5.4 Incentives andremuneration

DISCLOSURE
SUB-ELEMENTS

Action2.4. Financial planning

Accountability

5.5 Skills, competencies andtraining

Figure 3: The TPT Disclosure Framework

16

Transition Plan Taskforce

2.2 GUIDING PRINCIPLES: AMBITION, ACTION AND ACCOUNTABILITY
The three guiding principles of Ambition, Action and Accountability that underpin the TPT Disclosure

Framework are elaborated below. These principles should be applied by an entity in accordance withthe duties of the entity’s directors and senior managers, constitutional documents, and relevant law or
regulation.

Ambition: Reflecting the urgency to act
Private sector entities are not passive participants

opportunities, minimise future risks and protect andplans should reflect the urgency to act, arisingmindset, the entity can also design its transitionin the climate transition. Good practice transition

from the observed changes in the climate and thelatest scientific findings about climate change.
They should be informed by and respond to

relevant national and international commitments
by governments such as Nationally Determined
Contributions (NDCs) in the Paris Agreement.

enhance its long-term value. Applying a strategicplan in a way that will protect and enhance long-term value for the stakeholders, society, economy
and natural environment on which it depends. To
achieve this, the TPT recommends that an entity:•

All economic entities operate in an interdependentclimate-related risks and opportunities, andnet zero target setting can lead to unintended

contributing to an economy-wide transition

consequences. It is also important that entities
objectives may impact other sustainability goals.
The TPT therefore recommends that, in setting its
Strategic Ambition and designing its transition
plan, an entity take a “strategic and rounded”

approach (See Box 1). That is, the entity should
14

consider the actions that it can take now to capture

designing its transition plan – decarbonising
the entity, responding to the entity’ssystem in which an exclusive focus on entity-levelconsider how pursuing their climate transition

Considers three inter-related channels in(Figure 4).
•

Discloses whether and how it has identified,assessed, and taken into account the impacts
and dependencies of the transition plan on

the entity’s stakeholders, society, the economy,
and the natural environment, throughout its

value chain, that may give rise to sustainabilityrelated risks and opportunities.

14) Such an approach is consistent with expectations already embedded within the UK’s financial architecture. For example, the PRA’s Supervisory 		Statement (SS3/19) discusses how the distinctive elements of climate risk present unique challenges and require a strategic approach. Principle 4 of the 		
UK’s Stewardship Code asks signatories to explain how they have identified and responded to systemic risk(s), including those from climate change.

17

Transition Plan Taskforce1		Decarbonising the entity: The entity’s

ambitions and actions, ineithereitherin its own
operations or value chain, in the short-,
short,
medium andmediumandlong
long-term,
term, totoreduce
reduceitsits
GHG emissions (e.g., to net zero).

2	Responding to the entity’s climaterelayed risks
relatedrisks andand opportunities:
opportunities

The entity’s ambitions and actions toenhance its resilience to the changing

Decarbonising
the entity

Taking a
strategic& rounded
approach

Responding
to the entity’s
climaterelated risks &opportunities

climate and respond to the risks andopportunities that arise from the transition
to a low-GHG emissions, climate-resilient3

economy.

 	Contributing to an economy-wide

Contributing to an
economy-wide
transitiontransition: The
Theentity’s
entity’sambitions
ambitionsand
andactions to use the levers and capabilities

it has available to embed and acceleratea transition to a low-GHG emissions andclimate-resilient economy.

Figure 4: Three inter-relatedchannels for a strategic androunded approach

In defining its Strategic Ambition, an entity should be clear about the key assumptions that it has used,

and the external factors on which it depends. This can help to address the risks of both “greenwashing” 15

and “greenwishing” 16, strengthening a transition plan’s credibility as well as helping to inform effective
climate policy.

Taking a strategic and rounded
approach to transition planningwill help to protect and enhance anentity’s long-term value.
15) "Greenwashing" can arise when entities make unsubstantiated climate and environmental claims, potentially misleading consumers and wider 		stakeholders.
16) "Greenwishing" can arise when entities place too heavy a reliance on optimistic assumptions relating to longer-term developments, such as the 		
emergence of new technology, at the cost of short-term action.

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Transition Plan Taskforce

Box 1: Unintended consequences and the need for a strategic androunded approach
Since all entities operate in an interdependent system, an exclusive focus on achieving GHG

emissions or adaptation targets within an entity’s own operations and value chain can lead tounintended consequences.

For example, a strategy focused entirely on net zero target setting could incentivise entities topursue a strategy of "paper decarbonisation" – that is, greening the entity’s own balance sheet ina way that may not necessarily contribute to greening the economy.17

Simply transferring ownership of high-carbon assets to other actors in the system, who may
be less well placed to bear the risk or phase out their use, can be counter-productive to an

economy-wide transition. In the case of financial institutions, a sole focus on reducing portfolio
emissions18 can lead to both "false positives" (e.g. divesting from companies with relatively highemissions that may benefit from, and be enabling of, the transition to a low-GHG emissions

economy19) and "false negatives" (e.g. investing into companies that report low emissions but

may be exposed to transition risk by supporting the continuation of a high-carbon economy20).

Similarly, there is a risk that where entities do not consider their place in the wider system, theirtransition plans could lead to maladaptation and could increase, rather than reduce, thevulnerability to climate change.21 For example, a company may decide to situate an electrolysis

plant for the creation of hydrogen in a water-sensitive location, increasing the wider vulnerabilityof society and stakeholders to drought.

The TPT therefore recommends that entities take a strategic and rounded approach,22

considering the role they can play in reducing economy-wide emissions. In so doing, an entity

can improve its resilience and protect and enhance its long-term value, while also strengthening
resilience for all.

There is a risk that where entities do
not consider their place in the wider
system, their transition plans could
lead to maladaptation
17) See, for example, remarks by Sarah Breeden, Executive Director at the Bank of England, Balancing on the net zero tightrope.
18) See, for example, Emissions Impossible: Quantifying financial risks associated with the net zero transition.
19) For example, companies mining copper or lithium or those accelerating lower-carbon solutions in historically harder to abate sectors or emerging
markets.
20) For example, companies providing services or software to the coal, oil, and gas sector.
21) See, for example, Schipper (2020) Maladapation: When Adaptation to Climate Change Goes Very Wrong.
22) Such an approach calls for a dashboard of metrics, including and beyond emissions. For example, as recommended by the UK’s Climate Financial
Risk Forum, Climate Disclosure Dashboard 2.0, 2023.

Photo Jeremy Bishop, Unsplash.com

19

Transition Plan Taskforce

Action: Translating strategic ambition into concrete, short-term steps
A transition plan should translate ambitious objectives and priorities into concrete steps to be taken in the

short-, medium- and long-term. It should emphasise in its disclosure a roadmap of planned actions that willcontribute to meeting its Strategic Ambition.

Good practice transition plans should consider Scope 1, 2, and 3 emissions and should prioritise

decarbonisation through direct abatement over purchasing carbon credits. Short-term actions should seek
to deliver adaptation and mitigation benefits now, and to fill existing deficits of preparedness for extreme

weather. At the same time, a transition plan should seek to ensure that climate is appropriately considered
in decisions with long lifetimes to avoid the risk of “carbon lock-in” and to ensure resilience to the greater
incidence of extreme weather expected in the near future.

Entities should ensure that their planned actions are underpinned by appropriate resourcing plans. An

entity should assess the sensitivity of its plan to changes in key assumptions and external factors on which it
depends, and should seek to mitigate delivery risks where possible.

Accountability: Enable delivery through robust governance and reporting
A transition plan is integral to an entity’s wider corporate strategy. Delivery of a transition plan should

therefore be fully integrated into the entity’s organisational processes for business and financial planning,
and for governance.

An entity should define clear roles and responsibilities for the delivery and oversight of its transition plan andshould take steps to align culture and incentive structures with the Strategic Ambition set out in the plan.
An entity should report material information about its transition plan within its general purpose financial
reports, including annual reporting on progress against quantified and timebound metrics and targets.

Transition plans should be flexible, dynamic, and responsive to new information and external developments.
They should therefore be regularly reviewed and updated.

Entities should ensure that theirplanned actions are underpinned
by appropriate resourcing plans.

20Transition Plan Taskforce

3. B
 UILDING CAPACITY AND SUPPORTING GOOD PRACTICEIn setting out this approach, the TPT recognises that

help practitioners navigate the existing external

availability and quality of data available to market

Protocol, SBTi, TNFD), and get started.

good practice will take time to develop and that theparticipants will need to improve.

The Disclosure Recommendations in the Framework
are principles-based. They have been designed toaccommodate evolution both in entities’ climate

ambition and in their transition planning practices,and to allow for the detail and richness of theirreporting to evolve over time.

For instance, the Framework allows for progressover time in some of the challenging areas oftransition planning and transition plan disclosure –e.g. how entities map and engage with their supply
chains; how they quantify the financial effects ofresources, tools, and methodologies (e.g. the GHG
The TPT is working closely with industry and wider

stakeholders to help build a community of practice.
Its activities include a Sandbox initiative andextensive international outreach and engagement.
As transition planning becomes established asa practice the TPT also expects complementary

tools to emerge – e.g. taxonomies, forward-looking
alignment metrics, assessment methodologies,
software, and analytical tools. The emergenceof these tools will enhance the positive impact oftransition plan disclosures across the range of use
cases described above.

their plans; how they integrate consideration ofEmbedding robust transition planning across the

respond to interdependencies with stakeholders,

useful, and consistent transition plan disclosures

climate adaptation; and how they manage andsociety, the economy, and the natural environment.
The TPT aims to act as an accelerator in thisprocess by providing clarity and guidance on
what good practice looks like. Alongside theFramework, the TPT has developed “The Transition
Planning Cycle”, which outlines various steps that

entities may take as they develop and iterate theireconomy and ensuring high-quality, decision-

will not be easy. This challenge will require close
collaboration between market participants,

regulators, state actors, standard setters, and civilsociety, to accelerate progress towards a coherent
and shared framework and towards a common
language and approach for transition planning
both in the UK and internationally.

transition plans. This guidance is also intended to

Photo Henning Witzel, Unsplash.com

The TPT is working closely withindustry, and wider stakeholders to
help build a community of practice21Transition Plan Taskforce

4. THE TPT DISCLOSURE FRAMEWORKBuilding on the definition and principles set out, the TPT has drawn on the transition plan components
identified by GFANZ to set out the five key Elements of a good practice transition plan.
1.

Foundations: An entity shall disclose the Strategic Ambition of its plan. This shall comprise theentity's objectives and priorities for responding and contributing to the transition towards a lowGHG emissions, climate-resilient economy, and set out whether and how the entity is pursuingthese objectives and priorities in a manner that captures opportunities, avoids adverse impacts forstakeholders and society, and safeguards the natural environment. Under this element, an entity

should also disclose the high-level implications that this transition plan will have on its business modeland value chain, as well as the key assumptions and external factors on which the plan depends.
2.

Implementation Strategy: An entity shall disclose the actions it is taking within its business operations,products and services, and policies and conditions to achieve its Strategic Ambition, as well as theresulting implications for its financial position, financial performance, and cash flows.

3.

Engagement Strategy: An entity shall disclose how it is engaging with its value chain, industry peers,
government, public sector, communities, and civil society in order to achieve its Strategic Ambition.

4. Metrics & Targets: An entity shall disclose the metrics and targes that it is using to drive and monitor
progress towards its Strategic Ambition.

5. Governance: An entity shall disclose how it is embedding its transition plan within its governancestructures and organisational arrangements in order to achieve the Strategic Ambition of its
transition plan.

The TPT’s Disclosure Framework breaks theseIn addition to including transition plan disclosures as

which is supported by a series of Disclosure

regards it as good practice for an entity periodically

Elements down into 19 Sub-Elements, each of
Recommendations. Where Recommendations are
introduced using “shall”, this indicates that the TPTviews these as relevant disclosures for all goodpractice transition plans, subject to a materiality
assessment. Some Sub-Elements also containexamples of additional disclosures that an entity

part of its general purpose financial reports, the TPT
to publish its transition plan in a single standalone
document that sits alongside its general purpose
financial reports.

Further guidance including case studies can befound on the TPT website

may consider, but which may not be relevant to

The materials produced by the TPT reflect a“e.g.”, and are not intended to be comprehensive.

They do not constitute financial, legal, or otherinformation under these Sub-Elements.

as such. Nothing in the Disclosure Framework is

all entities. These are introduced using “may” orsynthesis of best practice at the time of publication.

This means an entity may consider disclosing otherprofessional advice and should not be relied upon

The TPT Disclosure Framework uses the ISSB’s

definition of a climate-related transition plan, andapplies the same approach to materiality and thewider set of concepts, definitions, and corporate

reporting norms that are set out in the ISSB’s General
Requirements standard (IFRS S123) (see Appendix 1:

Reporting of transition plans).

intended to override, substitute, or alter existing

legal or regulatory requirements, including, without
limitation, duties of the entity’s directors andsenior managers, and the entity’s constitutional

documents. Nothing in this Disclosure Framework

should be understood to require the disclosure ofcommercially sensitive information.

23) IFRS S1, General Requirements for Disclosure of Sustainability-related Financial Information, 2023.

22

Foundations

Sub-Element

1.

Transition Plan Taskforce1.1

Strategic Ambition

An entity shall disclose the Strategic Ambition of its transition plan. This shall comprise the entity’s objectives

and priorities for responding and contributing to the transition towards a low-GHG emissions, climate-resilient
economy, and set out whether and how the entity is pursuing these objectives and priorities in a manner that
captures opportunities, avoids adverse impacts for stakeholders and society, and safeguards the natural

Disclosure Recommendations

environment.

As part of this, an entity shall disclose:a.

its objectives and priorities:
i.
ii.
iii.

b.

for reducing its Scope 1, 2 and 3 GHG emissions in either its operations or value chain
for enhancing its resilience to the changing climate and responding to the risks and opportunities

that arise from the transition to a low-GHG emissions, climate-resilient economy

for using the levers and capabilities it has available to embed and accelerate a transition to a low-

GHG emissions climate-resilient economy

whether and how it has identified, assessed and taken into account the impacts and dependencies of
the transition plan on its stakeholders (e.g. its workforce, value chain counterparts, customers), society(e.g. local communities), the economy, and the natural environment, throughout its value chain, that may
give rise to sustainability-related risks and opportunitiesc.

the extent to which it has taken into account and aligned with any external requirements, commitments,
science-based targets, transition pathways, roadmaps, or scenarios, which may include:i.

national or international commitments made by governmentsii.

any targets it is required to meet by law or regulationiii.

sectoral pathways, roadmaps, or other climate scenarios

iv.

voluntary commitments (e.g., existing public commitments, organisational and industry standards,

contractual relationships, codes of practices etc.)d.

any potential trade-offs, synergies or co-benefits identified between the objectives and priorities in 1.1ae.

any short-, medium- and long-term targets and milestones it has set to measure progress, including how
short-, medium-, and long-term are defined in the context of transition planning.24

24) The TPT recommends that the short-term is defined as no longer than three years. This would align with the recommended publication cycle ofstandalone transition plans. If the entity defines short-term as exceeding three years, it would be good practice to provide an explanation for why
this is the case.

Disclosure Recommendations

Sub-Element

Disclosure Recommendations

Sub-Element

23

Transition Plan Taskforce

1.2 Business model and value chain
An entity shall disclose a description of the current and anticipated implications of the entity’s Strategic
Ambition on its business model and value chain.

As part of this, an entity shall disclose:a.

at a high level the current and anticipated strategic changes to its business model and value chain,b.

the timeframe over which changes are expected to occur.

as elaborated in 2. Implementation Strategy and 3. Engagement Strategy

1.3 Key assumptions and external factors
An entity shall disclose key assumptions that it has made and external factors on which it depends in orderto achieve the Strategic Ambition of its transition plan.

As part of this, an entity shall disclose:a.

the nature of the key assumptions that it uses and external factors on which it depends, and theirimplications for the achievement of the Strategic Ambition of its transition plan; these may relate tomatters such asi.

policy and regulatory changeii.

the decarbonisation trajectory of the global economy, relevant geographies, and/or sectors

iii.

macroeconomic trends (e.g. labour availability, cost of borrowing etc.)

iv.

microeconomic and financial factors (e.g. availability of finance, relative prices)v.

technological developments

vi.

access to counterparty data and reliability of datavii.

shifts in client and consumer demandviii. the levels of warming over the short-, medium-, and long-termix.

the physical impacts of the changing climate, and the regional and spatial implications ofx.

the effectiveness of adaptation efforts and possible limits to adaptation, and the regional andthese

spatial implications of theseb.

the timeframes over which any key assumptions and external factors under 1.3.a. are expected to occurc.

whether and how the key assumptions under 1.3.a. are reflected in the entity’s financial statements.

24Transition Plan Taskforce

Disclosure Recommendations

Sub-Element

2. Implementation Strategy
2.1 Business operations
An entity shall disclose information about the short-, medium-, and long-term actions it is taking or plans totake in its business operations in order to achieve the Strategic Ambition of its transition plan.

As part of this, an entity shall disclose:a.

b.

information about any current and anticipated actions, including timelines, relating to matters such as:i.

its production processes or equipmentii.

workforce adjustmentsiii.

supply chain and procurement

information about any current and anticipated changes relating to the entity’s facilities and other physicalassets, such as:i.

the location of offices and operationsii.

the responsible retirement or phase-out of GHG-intensive assetsiii.

the management of assets that are exposed to risks arising from the changing climate

iv.

Disclosure Recommendations

Sub-Elementc.

the management of long-lived assets that may be impacted as a result of the transition to a low-GHG

emissions, climate-resilient economy

the expected principal contributions of its actions towards achieving its Strategic Ambition.

2.2 Products and services
An entity shall disclose information about short-, medium-, and long-term actions it is taking or plans to taketo change its portfolio of products and services in order to achieve the Strategic Ambition of its transitionplan.

As part of this, an entity shall disclose:a.

information about any current and anticipated actions, including timelines, to change the portfolio

of products and services that it provides or facilitates (e.g. via franchising, financing, or underwriting
activities)b.

any underlying taxonomy, tools, methodologies, or definitions used to classify products and servicesc.

the expected principal contributions of its actions towards achieving its Strategic Ambition.

under this Sub-Element

Disclosure Recommendations

Sub-Element

25

Transition Plan Taskforce

2.3 Policies and conditions
An entity shall disclose information about any policies and conditions that it uses or plans to use in order toachieve the Strategic Ambition of its transition plan.

As part of this, an entity shall disclose:a.

a brief description of any policy or condition that it uses or plans to use in order to achieve the Strategic
Ambition of its transition plan; these may relate, as appropriate, to matters such as:i.

energy usageii.

phase-out of GHG-intensive assetsiii.

climate-related considerations in procurement/for suppliersiv.

climate-related considerations (e.g. thresholds, targets or restrictions) in lending or investment activitiesv.

adapting and building resilience to the changing climatevi.

supplier engagementvii.

portfolio engagementviii. land use and land management changes (e.g. deforestation)

b.

ix.

safeguards to address potential adverse impacts on the natural environmentx.

human rights

xi.

labour standards

xii.

advancing social equity or addressing potential adverse social impacts (e.g. on communities)

the expected principal contributions of the policy or condition towards achieving its Strategic Ambition.

Disclosure Recommendations

Sub-Element

26

Transition Plan Taskforce

2.4 Financial planning
An entity shall, to the extent the financial effects of its transition plan are separately identifiable, disclose

information about the effects of its transition plan25 on its financial position, financial performance and cash
flows26 over the short-, medium-, and long-term, including information about how it is resourcing or plans toresource its activities in order to achieve the Strategic Ambition of its transition plan.27

As part of this, an entity:a.

shall disclose information about how the entity is resourcing, and plans to resource, the current and plannedb.

shall disclose qualitative and quantitative information about how it expects implementation of its transition

activities set out in its transition plan

plan to affect its financial position over the short-, medium-, and long-term, taking into consideration
matters such as:i.

its investment and disposal plans (e.g. plans for capital expenditure, major acquisitions anddivestments, joint ventures, business transformations, innovation, new business areas, investments into
research and development for climate solutions, and asset retirements), including plans to which theentity is not contractually committedii.
c.

planned sources of funding to implement its plan

shall disclose qualitative and quantitative information about how it expects implementation of its transition
plan to affect its financial performance and cash flows over the short-, medium-, and long-term (e.g.
increased revenue from products and services aligned with a low-GHG emissions, climate-resilient
economy, and expenses associated with climate adaptation or mitigation)28

d.

e.

f.

shall, in disclosing information about 2.4 b–ci.

use all reasonable and supportable information that is available to the entity at the reporting dateii.

use an approach that is commensurate with the skills, capabilities, and resources that are available towithout undue cost and effort

the entity for preparing those disclosuresmay, in disclosing quantitative information under 2.4 b–ci.

disclose a single amount or a rangeii.

prioritise quantitative information for current financial effects and those of short-term actions that may
be more certain

need not provide quantitative information about some or all of 2.4 b–ci.

ii.

if it determines that:1.

those effects are not separately identifiable or2.

the level of measurement uncertainty involved in estimating those effects is so high that theresulting quantitative information would not be useful

if it does not have the skills, capabilities, or resources to provide that quantitative information.

25) Please note that 2.4.c is not intended to cover information about the financial effects of wider climate-related risks and opportunities. Instead the focus lies on
the direct and indirect effects from implementing the transition plan itself.
26) For entities in the financial sector, this should cover the financial performance of the entity itself and not its investment or lending portfolio.
27) This Sub-Element should be regarded as distinct from the Disclosure Recommendations under Sub-Element 4.2 Financial metrics and targets. Under
2.4 Financial planning, the focus should lie on demonstrating that the entity has integrated the transition plan into its financial planning and disclosing 		
expected financial effects. Under Sub-Element 4.2 Financial metrics and targets, on the other hand, the entity should disclose the financial metrics and 		targets that it is using to assess progress and delivery of the plan over time.
28) This may include quantitative information about the combined financial effects of the transition plan with other aspects of wider corporate strategy 		
unless the entity determines that quantitative information about the combined financial effects would not be useful.

Disclosure Recommendations

27

Transition Plan Taskforceg.

shall, if in accordance with 2.4.f it need not provide quantitative information about some or all of 2.4 b–ci.

explain why it has not provided quantitative informationii.

explain how the implementation of its transition plan is covered within its wider financial planning andiii.

provide qualitative information about how considerations related to the implementation of thefinancial decision-making processes

transition plan are integrated into the entity’s investment and disposal plans (e.g. plans for capital

expenditure, major acquisitions and divestments, joint ventures, business transformations, innovation,
new business areas, investment into research and development for climate solutions, and asset
retirements), including plans to which the entity is not contractually committed.

28Transition Plan Taskforce

Disclosure Recommendations

Sub-Element

Disclosure Recommendations

Sub-Element

3. Engagement Strategy
3.1

Engagement with value chain

An entity shall disclose information about any engagement activities with other entities in its value chain that it
is undertaking or plans to undertake in order to achieve the Strategic Ambition of its transition plan.

As part of this, an entity shall disclose:a.

an explanation of how the entity prioritises engagement activities in order to maximise their contribution
towards achieving the Strategic Ambition of the entity’s transition plan; this may reference key
assumptions and external factors disclosed under 1.3 Key assumptions and external factorsb.

a description of current and planned engagement activities; for financial services entities this may

include engagement and, where relevant, other stewardship activities, with investee companies, loanclients and relevant financial market intermediariesc.

a description of escalation processes or criteria in place to manage instances where engagementd.

the expected principal contributions of its activities towards achieving its Strategic Ambition.

activities do not lead to the desired changes

3.2 Engagement with industry
An entity shall disclose information about any engagement and collaborative activities with industry

counterparts (and other relevant initiatives or entities) that it is undertaking or plans to undertake in order toachieve the Strategic Ambition of its transition plan.

As part of this, an entity shall disclosea.

information about memberships in trade organisations or industry bodiesb.

an explanation of how the entity prioritises engagement and collaborative activities in order tomaximise their contribution towards achieving the Strategic Ambition of the entity’s transition plan;
this may reference key assumptions and external factors disclosed under 1.3 Key assumptions andexternal factors

c.

a description of current and planned engagement and collaborative activities with membershipbodies, industry associations, industry counterparts (and other relevant initiatives or entities; e.g. peers
and labour unions) including any commitments by the entity arising from these activities29d.

the expected principal contributions of its activities towards achieving its Strategic Ambitione.

the steps it takes to monitor the activities of membership bodies or industry bodies in which it
participates and minimise any actions that may conflict with its own Strategic Ambition.

29) Note: The TPT notes the similarity between this recommendation and the Disclosure Recommendations on indirect policy engagement under 3.3
Engagement with government, public sector and civil society. Under 3.2 Engagement with industry the primary focus lies on outlining significant
engagement activities undertaken to influence membership bodies, industry associations, industry counterparts, and other relevant entities. Under 3.3
Engagement with government, public sector and civil society, the focus lies on outlining significant engagement activities undertaken in collaboration with,or via, trade associations to influence the decision-making and policy positions of government and the public sector.

Disclosure Recommendations

Sub-Element

29

Transition Plan Taskforce

3.3 Engagement with government, public sector and civil society
An entity shall disclose information about any direct and indirect engagement activities with the government,
regulators, public sector organisations, communities, and civil society that it is undertaking or plans toundertake in order to achieve the Strategic Ambition of its transition plan.

As part of this, an entity shall disclose:a.

an explanation of how the entity prioritises engagement activities in order to maximise their contribution
towards achieving the Strategic Ambition of the entity’s transition plan; this may reference key
assumptions and external factors disclosed under 1.3 Key assumptions and external factorsb.

a description of current and planned engagement activitiesc.

the expected principal contributions of its activities towards achieving its Strategic Ambition.

30

Transition Plan Taskforce

Disclosure Recommendations

Sub-Element

4. Metrics & Targets
4.1 Governance, business and operational metrics and targets
An entity shall disclose information about the governance, engagement, business and operational 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 shall:a.

disclose any targets it has set, and any targets it is required to meet by law or regulationb.

disclose information about how the targets disclosed under 4.1.a reflect the Strategic Ambition of its
transition plan, and how they relate to the actions outlined under 2. Implementation Strategy and3. Engagement Strategyc.

for each target disclosed under 4.1.a, disclose:i.

the metric used to set the targetii.

the objective of the targetiii.

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

the period over which the target appliesv.

the base period and value from which progress is measuredvi.

any milestones or interim targetsvii.

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 commitmentsthat arise from that agreement, has informed the target

d.

e.

ix.

whether and how the target aligns with any pathways disclosed under 1.1.c including, where possible,x.

any underlying taxonomy, tools, methodologies, or definitions on which this metric relies

the expected trajectory of how this target will be achieveddisclose information about its approach to setting and reviewing each target disclosed under 4.1.a,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 partyii.

the entity’s processes for reviewing the targetiii.

the metrics used to monitor progress towards meeting the target

report against metrics used to assess progress towards the targets disclosed under 4.1.a at least on anannual basis; this shall include:i.

information about its performance against each targetii.

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

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

any revisions to the target and explanation for those revisions.

Disclosure Recommendations

Sub-Element

31

Transition Plan Taskforce

4.2 Financial metrics and targets
An entity shall disclose information about any financial metrics and targets, relevant to its business, sector,

and strategy, 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 any targets it has set, and any targets it is required to meet by law or regulation; forb.

shall disclose information about how the targets disclosed under 4.2.a reflect the Strategic Ambition

financial services, this may include targets related to its investment and lending activities

of its transition plan, and how they relate to the actions outlined under 2. Implementation Strategy
and 3. Engagement Strategy

c.

shall for each target disclosed under 4.2.a, disclose:i.

the metric used to set the targetii.

the objective of the targetiii.

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

the period over which the target appliesv.

the base period and value from which progress is measuredvi.

any milestones or interim targetsvii.

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 commitmentsthat arise from that agreement, has informed the target

d.

e.

f.

ix.

whether and how the target aligns with any other pathways disclosed under 1.1.c including, wherex.

any underlying taxonomy, tools, methodologies, or definitions on which this metric relies

possible, the expected trajectory of how this target will be achieved

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

whether the target and the methodology for setting the target has been validated by a third partyii.

the entity’s processes for reviewing the targetiii.

the metrics used to monitor progress towards meeting the target

shall report against metrics used to assess progress towards the targets disclosed under 4.2.a at least
on an annual basis; this shall include:i.

information about its performance against each targetii.

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

whether and to what extent (if known) measurements rely on estimated dataiv.

any revisions to the target and explanation for those revisions

shall disclose an explanation of whether and how the entity is applying a carbon price in decision-

making (for example, investment decisions), and the price for each metric tonne of greenhouse gas
emissions that the entity uses to assess the cost of its emissionsg.

may disclose a single amount or a range in providing quantitative information under 4.2.a–f.

Disclosure Recommendations

Sub-Element

32

Transition Plan Taskforce

4.3 GHG metrics and targets
An entity shall disclose information about the GHG emissions and removals metrics and targets that it uses inorder 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 2b.

shall disclose information about any targets for reducing absolute gross GHG emissions for Scope 3 that itc.

shall disclose information about any additional GHG emissions targets that it has set (e.g. methaned.

shall disclose information about how the targets disclosed under 4.3.a–c reflect the Strategic Ambition ofthat it has set
has setreduction targets)

its transition plan, and how they relate to the actions outlined under 2. Implementation Strategy and3. Engagement Strategye.

may disclose information about any gross GHG emissions intensity targets expressed as metric tonnes off.

may disclose gross GHG emissions intensity targets expressed as metric tonnes of CO2 equivalent per unitg.

may disclose any targets for increasing GHG removals from activities such as land use, land use change,h.

shall disclose the categories of Scope 3 GHG emissions included within the target disclosed under 4.3.b

CO2 equivalent per unit of physical or economic output for Scopes 1 and 2of physical or economic output for Scope 3

bioenergy, and carbon removal technologies

and, where it has excluded categories of Scope 3 GHG emissions from its targets, disclose the reason foromitting 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 targetii.

the objective of the targetiii.

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

the period over which the target appliesv.

the base period and value from which progress is measuredvi.

any milestones or interim targetsvii.

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 commitmentsthat arise from that agreement, has informed the targetix.
j.

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

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 partyii.

the entity’s processes for reviewing the targetiii.

the metrics used to monitor progress towards meeting the target

Disclosure Recommendations

33

Transition Plan Taskforcek.

l.

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 targetii.

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

whether and to what extent (if known) measurements rely on estimated dataiv.

any revisions to the target and explanation for those revisions

shall in disclosing information on GHG emissions under 4.3.ki.
ii.

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

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.

iv.

v.

disclose the approach it uses to measure its GHG emissions under 4.3.l.i, including:1.

the measurement approach, inputs, and assumptions the entity uses to measure its GHG

2.

the reason why the entity has chosen the measurement approach, inputs, and assumptions it uses3.

any changes the entity made to the measurement approach, inputs, and assumptions during theemissions

to measure its GHG emissions

reporting period and the reasons for those changes

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

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 emissionsvi.

for Scope 3 GHG emissions disclosed under 4.3.l.i, disclose: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 (Scope3) 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 technologiesi.

be separately identifiable from information about GHG emissions disclosed under 4.3.l.i and information

about carbon credits disclosed under 4.4

ii.

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

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

disclose the extent to which 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 andmitigation of social risks of removals usage (e.g. through human rights impact assessments)).

Sub-Element

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Transition Plan Taskforce

4.4 Carbon credits
An entity shall disclose information about how it uses or plans to use carbon credits to achieve the Strategic
Ambition of its transition plan, and report on the use of carbon credits on at least an annual basis.

Disclosure Recommendations

		
As part of this, an entity shall:a.

disclose an explanation of why the entity is employing carbon credits and the extent to which, and how,b.

disclose the number of credits sold, purchased and retiredc.

disclose which third-party scheme(s) has or will verify or certify the carbon creditsd.

disclose information about which standard or methodology the carbon credits have been or will bee.

disclose the type of carbon credit, including whether the underlying offset will be nature-based or based

the entity relies on the use of carbon credits to achieve the Strategic Ambition of its transition plan

certified against

on technological carbon removals, and whether the underlying offset is achieved through carbon
reduction or removalf.

disclose whether and how the entity identifies and manages the impacts and dependencies of carbon
credits 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 carbon credits usage (e.g. through human rights impact
assessments))g.

disclose any other factors necessary for users of general purpose financial reports to understand theh.

report on the use of carbon credits at least on an annual basis.

credibility and integrity of the carbon credit the entity is using or plans to use3030) This may include:•
Proof that the principles of Free, Prior and Informed Consent (FPIC) and Do No Harm were respected with local communities where theproject is situated, and, where appropriate, proof that projects respect, and ideally enhance, the rights of Indigenous Peoples and Local
Communities (IPLCs)
Information about the expected permanence of the carbon credit, including any measures in place to address the risk of reversal as well as•
measures in place to compensate reversals.

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Disclosure Recommendations

Sub-Element

5. Governance
5.1 Board oversight and reporting
An entity shall disclose information about the governance body(s) (which can include a board, committee,

or equivalent body charged with governance) or individual(s) responsible for oversight of the transition plan.

As part of this, an entity shall identify that body(s) or individual(s) and disclose:a.

its arrangements for review and approval of the transition plan and its Strategic Ambition, includingb.

how responsibilities for the transition plan are reflected in the terms of reference, mandates, rolec.

how the body(s) or individual(s) determines whether appropriate skills and competencies are availabled.

how and how often the body(s) or individual(s) is informed about the transition plane.

how the body(s) or individual(s) takes into account the transition plan when overseeing the entity’s

oversight of any changes, updates, and reporting

descriptions, and other related policies applicable to that body(s) or individual(s)or will be developed to oversee the transition plan

strategy, its decisions on major transactions and its risk management processes and related policies,

including whether the body(s) or individual(s) has considered trade-offs associated with the transition
plan

Disclosure Recommendations

Sub-Elementf.

how the body(s) or individual(s) oversees the setting of targets in the transition plan, and monitors
progress towards these targets and the wider strategic ambition of the transition plan.

5.2 Roles, responsibility and accountability
An entity shall disclose information about management’s role in the governance processes, controls, andprocedures used to monitor, manage, and oversee the transition plan, as well as how it is embedded within
the entity’s wider control, review, and accountability mechanisms.

As part of this, an entity shall disclose:a.

the identity of the management body(s) or individual(s) responsible for executive oversight andb.

the role of the body(s) or individual(s) in 5.2.a. in defining the Strategic Ambition of the transition plan,c.

how oversight is exercised over that body(s) or individual(s)d.

whether the body(s) or individual(s) in 5.2.a. uses controls and procedures to support the oversightdelivery of the transition plan

the setting of targets, and the monitoring of progressof the transition plan and ensure the reliability of information disclosed; if so, an entity shall disclose
how these controls and procedures are integrated with other internal functions and information

about which aspects of the transition plan are subject to external assurance or verification, including
the nature of the assurance or verificatione.

whether the transition plan is subject to shareholder approval, including through a shareholder vote.

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Transition Plan Taskforce

Sub-Element

5.3 Culture
An entity shall disclose information about how it aligns or plans to align its culture with the Strategic

Disclosure Recommendations

Sub-Element

Disclosure Recommendations

Ambition of its transition plan.

As part of this, an entity may disclose information about any relevant steps taken in respect of:a.

company values and purpose statementsb.

communications, systems, processesc.

HR policies and procedures (including escalation processes, compensation, and benefits); see 5.4d.

the employee value propositione.

leadership and manager training programmesf.

workforce engagement strategies.

Incentives and remuneration for disclosure recommendations on incentives and remuneration

5.4 Incentives and remuneration
An entity shall disclose information about how it aligns or plans to align its incentive and remuneration structureswith the Strategic Ambition of its transition plan.

As part of this, an entity shall disclose:a.

b.

a description of whether and how its executive incentive and remuneration structures are aligned with
the Strategic Ambition of its transition plan; this may include information about:i.

the metric(s) usedii.

whether the metric(s) is within the short-term and/or long-term incentive plan(s)iii.

the typical percentage weighting of the transition plan-related metric(s) within the incentive plan foriv.

the percentage of total executive remuneration that is linked to transition plan-related metric(s)the executive populationa description of whether and how incentive and remuneration structures for employees across theorganisation are aligned with the Strategic Ambition of its transition plan, including whether it hasapplied a consistent approach with that in 5.4.a or whether it has taken a differentiated approach for
specific teams or roles.

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Transition Plan Taskforce

5.5 Skills, competencies and training
An entity shall disclose information about actions it is taking or plans to take to assess, maintain, and build theappropriate skills, competencies, and knowledge across the organisation in order to achieve the Strategic

Disclosure Recommendations

Ambition of its transition plan.

As part of this, an entity shall disclose:a.

information about how the entity assesses whether it has the appropriate skills, competencies, andknowledge across the organisation to effectively design, develop, deliver, and govern the transition planin accordance with its Strategic Ambitionb.

where it has identified a skills gap, information about actions it is taking or plans to take to acquire orc.

information about actions it is taking or plans to take to provide the Board and executive management

develop the required skills

with access to the appropriate skills, competencies and knowledge required to effectively oversee thetransition plan.

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Transition Plan Taskforce

APPENDIX 1: REPORTING OF TRANSITION PLANS
The TCFD created an international framework for entities to disclose how they consider and respond toclimate-related risks and opportunities. In June 2023 the ISSB published IFRS S1 General Requirements forDisclosures of Sustainability-related Financial Information (IFRS S1) and IFRS S2 for Climate-related Disclosures(IFRS S2), both of which incorporate the TCFD recommendations. As of 2024, the IFRS Foundation will takeover the TCFD’s responsibilities for monitoring progress on companies’ climate-related disclosures, thereby
marking the culmination of the TCFD’s work.

The TPT’s Disclosure Recommendations are designed to be consistent with, and build on, the wider climate-

related disclosure requirements in the ISSB Standards. IFRS S2 includes several provisions that are relevant totransition planning. IFRS S2 does not require an entity to have a transition plan. However, it requires disclosureof any transition plan the entity has developed.

An entity should therefore not see the TPT Disclosure Recommendations as separable from or parallel toclimate-related financial disclosures prepared in accordance with the ISSB’s Standards. Rather, the TPT

Disclosure Framework provides additional recommendations on what a good practice climate transition

plan should cover. The TPT considers that its Recommendations can be used as guidance to help entities
report more effectively on the transition plan-related aspects of the ISSB Standards as part of wider
sustainability-related reporting aligned with these frameworks and standards.

To support preparers through the process of integrating content from their transition plan into disclosuresaligned with the ISSB Standards, the TPT has developed technical mapping documents which set out themain provisions in each of the TCFD’s recommendations and IFRS S2 that contain disclosure requirements
relevant to transition planning. For each provision, the TPT has identified the Recommendations in the

Disclosure Framework that an entity may wish to consider as a source of additional guidance when making
its disclosures.

The TPT further provides an overview of how the TPT Recommendations compare against the European
Sustainability Reporting Standards (ESRS) (see here).

Photo Mark Autumns, Unsplash.com

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Transition Plan Taskforce

LOCATION OF TRANSITION PLAN REPORTING
We recommend that entities integrate material information about their transition plan into their general
purpose financial reports. In addition, the TPT regards it as good practice that entities also prepare astandalone transition plan which is periodically updated and in which entities may choose to include

additional information that, while not considered material to primary users of general purpose financial

reports, may be helpful for clearly communicating their strategy. See page 41 “Standalone Report” for more
information.

INCORPORATING TRANSITION PLANS INTO GENERAL PURPOSE FINANCIAL REPORTS
The TPT recommends that an entity includes material information related to its transition plan, including
annual progress updates, within its wider sustainability-related disclosures. As noted in Table 1, in

determining material information to disclose, an entity should apply paragraphs 17–19 (and paragraphs
cross-referenced in these) of IFRS S1.

The TPT would therefore expect information related to the transition plan to feature within ISSB-aligned
disclosures made in relation to governance, strategy, risk management, and metrics and targets. For
example:•Information related to the governance of transition planning should be linked to, or form part of, overall•

Key details on an entity’s transition strategy should form an integral component of its overall climate•

Information related to the entity’s climate-related risks and opportunities to which the transition plan

governance disclosure (e.g., disclosures in line with par. 5–7 of IFRS S2).
strategy disclosure (e.g. disclosures in line with par. 8–23 of IFRS S2).

responds should be reported within an overall risk management disclosure (e.g. disclosures in line withpar. 23–26 of IFRS S2).

•

Transition-related targets and performance metrics should form part of overall climate-related metrics
and targets (e.g. disclosures in line with par. 27–37 of IFRS S2).

To further assist entities in integrating their transition plan disclosures with their wider reporting inaccordance with IFRS S2, Table 1 sets out the provisions in IFRS S2 that are relevant to transition planning andon which the TPT Framework provides additional guidance.

For each relevant provision(s) in IFRS S2 in the left-hand column, the right-hand column identifies the TPT

Disclosure Recommendation(s) that an entity may wish to consider as an additional source of guidance.
Following the TPT’s Disclosure Recommendations should encourage more complete, structured, anddecision-useful reporting on transition plans across the economy. Readers should note, however, that
fulfilling TPT requirements does not necessarily fulfil the IFRS S2 requirements.

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Transition Plan Taskforce

Table 1: High-level mapping of relevant IFRS S2 requirements and TPT Disclosure Recommendations
Relevant IFRS S2 provisions

TPT Disclosure Recommendations forconsideration

Par. 6(a)(i–v) (and 5, 29(g)(i–ii), 34(b))

5.1.a-f, 5.3.a–f, 5.4.a.i-iv, 5.4.b, 5.5.a–c

Par. 6(b)(i–ii) (and 5)

5.2.a–ePar. 10(d)1.1.ePar. 13(a–b), 14(a)(i–ii)

1.2.a–b, 2.1.a–c, 2.2.a–c, 2.3.a–b

Par. 14(a)(iii)

3.1.a–d, 3.2.a–e, 3.3.a–c

Par. 14(a)(iv–v) (and 9(c))

1.1.a, 1.1.b, 1.1.c.i, 1.3

Par. 14(b)2.4.aPar. 16(c)(i–ii)

2.4.bPar. 16(d)2.4.cPar. 17

2.4.e

Par. 18

2.4.dPar. 19

2.4.f.i

Par. 20

2.4.f.ii

Par. 212.4.g

Par. 29 (a)4.3.l-mPar. 33 (a-h) (and 27, 34 35)

1.1.e, 4.1.a–e, 4.2.a–g, 4.3.i–k

Par. 33 (h) (and 36 (d))

1.1.cPar. 36 (a–c) (and 27, 35)

4.3.a–hA full mapping of relevant IFRS S2 requirements and TPT Disclosure Recommendations are provided in the
TPT-ISSB Technical Mapping tables.

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Transition Plan Taskforce

ALIGNMENT WITH WIDER CORPORATE REPORTING NORMS
Where including transition plan disclosures as part of its general purpose financial reports, an entity shallapply the same corporate reporting norms to these disclosures as it applies to its wider sustainability-

related reporting in the same location. Table 2 below signposts corporate reporting norms from IFRS S1 to aid
preparers on how to interpret them when reviewing TPT Disclosure Recommendations.
Note: This list is non-exhaustive.

Table 2: IFRS S1 Corporate Reporting Norms
Norm

IFRS S1 Excerpts

Note: these excerpts are illustrative and non-exhaustive

Fair presentation

Par. 11-16

Materiality

Par. 17-19, B13-B37

Reporting entity

Par. 20, B38

Connected information

Par. 21-24, B39-B44

Location of disclosures

Par. 60-63, B45-B47

Timing of reportingPar. 64-69, B48

Comparative information

Par. 70-71

Judgements

Par. 74-76

Measurement uncertainty

Par. 77-82

ErrorsPar. 83-86, B55-B59

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Transition Plan Taskforce

STANDALONE REPORTIn addition to including transition plan disclosures

the ability of external audiences to understandthe TPT regards it as good practice for an entity to

the transition. It will also allow users to analyse,

as part of its general purpose financial reports,

publish its transition plan in a single standalone

document that sits alongside its general purpose
financial reports.

We recognise that this carries an additional

reporting burden for entities and may lead tothe duplication of some information. However,presenting the transition plan in a standalone
document will enable an entity to include

information that elaborates on, and provides a

deeper evidence base for, the material information
included in the entity’s general purpose financial

report. An entity may also consider including some

information in a standalone report that may not bematerial to users of its general purpose financial

reports, but may nevertheless be decision-useful toother stakeholders.

A standalone version of an entity’s transition plan
may also help a preparer to communicate moreclearly the nuances of its strategy, improving

Photo NASA, Unsplash.com

how the entity is managing the complexities ofcompare, and aggregate plans across entities

more effectively, and to hold entities to account.
In some jurisdictions, and in some circumstances,an entity may be able to include material

information about its transition plan in its general
purpose financial reports by cross-referencing toa standalone plan or another report published by

the entity. An entity should follow the guidance on

information included by cross-reference outlined in
IFRS S1 (par. B45–47).

The TPT recommends that entities update theirstandalone transition plan periodically, either when
there are significant changes to the plan or, atthe latest, every three years. If an entity preparesa long-form TCFD or sustainability report outsideof the general purpose financial reporting, thetransition plan should be clearly separable (e.g. as
an appendix or separate document).

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Transition Plan Taskforce

Glossary
TermDefinitionbusiness model

An entity’s system of transforming inputs through its activities into outputs andoutcomes that aims to fulfil the entity’s strategic purposes and create value for theentity and hence generate cash flows over the short-, medium- and long-term. (Source:
IFRS S1 Appendix A)

business
operations

Activities that an entity performs in order to produce, market, and distribute goods andcarbon credit

An emissions unit that is issued by a carbon crediting programme and represents anservices, and remain open for business.

emissions reduction or removal of greenhouse gases. Carbon credits are uniquely

serialised, issued, tracked, and cancelled by means of an electronic registry. (Source:
IFRS S2 Appendix A)

climate resilience

At the entity-level: the capacity of an entity to adjust to climate-related changes,

developments, or uncertainties. Climate resilience involves the capacity to manage
climate-related risks and benefit from climate-related opportunities, including theability to respond and adapt to climate-related transition risks and climate-related

physical risks. An entity’s climate resilience includes both its strategic resilience and its
operational resilience to climate-related changes, developments, and uncertainties.
(Source: IFRS S2 Appendix A)

At the systems-level: the capacity of interconnected social, economic, and ecologicalsystems to cope with a hazardous event, trend, or disturbance, responding or

reorganising in ways that maintain their essential function, identity, and structure.

Resilience is a positive attribute when it maintains capacity for adaptation, learning,
and/or transformation. (Source: IPCC Sixth Assessment Report, Impacts, Adaptation
Vulnerability. Annex II)

entityAn organisation that voluntarily chooses, or is required by law, to prepare a generalgeneral purpose
financial reports

Reports that provide financial information about a reporting entity that is useful topurpose financial report.

primary users in making decisions relating to providing resources to the entity. Those
decisions involve decisions about:(a) buying, selling, or holding equity and debt instruments;(b) providing or selling loans and other forms of credit; or(c) exercising rights to vote on, or otherwise influence, the entity’s management’s actions
that affect the use of the entity’s economic resources.

General purpose financial reports include-but are not restricted to-an entity’s general

purpose financial statements and sustainability-related financial disclosures. (Source:
IFRS S1 Appendix A)

greenhousegases

GHGs are the six gases listed in the Kyoto Protocol: carbon dioxide (CO2); methane (CH4);

just transition

The just transition involves anticipating, assessing, and addressing the social

nitrous oxide (N2O); hydrofluorocarbons (HFCs); perfluorocarbons (PFCs); and sulphur
hexafluoride (SF6) (Source: Greenhouse Gas Protocol, Glossary)risks and opportunities of the transition to a low-GHG emissions andclimate-resilient development, as well as ensuring meaningful dialogue andparticipation for impacted groups (including workers, communities, supply chains,and consumers) in transition planning.

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Transition Plan Taskforce

Term

Definition
Definition

latest international
agreement on
climate change

An agreement by states, as members of the United Nations Framework Convention onmaterial
information

In the context of sustainability-related financial disclosures, information is material if

Climate Change, to combat climate change. The agreements set norms and targets fora reduction in greenhouse gases. (Source: IFRS S2 Appendix A) E.g., the Paris Agreement.

omitting, misstating, or obscuring that information could reasonably be expected toinfluence decisions that primary users of general purpose financial reports make on

the basis of those reports, which include financial statements and sustainability-related
financial disclosures and which provide information about a specific reporting entity.
(Source: IFRS S1 Appendix A)

naturalenvironment(a) Plants, wild animals and other living organisms;(b) their habitats; and(c) land (except buildings or other structures), air, and water,

and the natural systems, cycles, and processes through which they interact.

policies andconditions

Internal guidelines developed by an organisation to govern its actions.

Scope 1emissions

Direct greenhouse gas emissions that occur from sources that are owned or controlled

Scope 2emissionsIndirect greenhouse gas emissions from the generation of purchased or acquiredby an entity. (Source: IFRS S2 Appendix A)

electricity, steam, heating, or cooling consumed by an entity. Purchased and acquired

electricity is electricity that is purchased or otherwise brought into an entity’s boundary.
Scope 2 greenhouse gas emissions physically occur at the facility where electricity is
generated.

Scope 3emissionsIndirect greenhouse gas emissions (not included in Scope 2 greenhouse gas emissions)that occur in the value chain of an entity, including both upstream and downstream
emissions. Scope 3 greenhouse gas emissions include the Scope 3 categories in theGreenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and reportingStandard (2011). (Source: IFRS S2 Appendix A)

Strategic Ambition

An entity’s overarching aims for its transition plan. This will comprise the entity’s

objectives and priorities for responding and contributing to the transition towards a lowGHG emissions, climate-resilient economy, and set out whether and how it is pursuingthese objectives and priorities in a manner that captures opportunities, avoids adverse
impacts for stakeholders and society, and safeguards the natural environment.

transition planA 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)

value chain

The full range of interactions, resources, and relationships related to a reporting entity’sbusiness model and the external environment in which it operates.

A value chain encompasses the interactions, resources, and relationships an entity uses anddepends on to create its products or services from conception to delivery, consumption,and end-of-life, including interactions, resources, and relationships in the entity’s operations,such as human resources; those along its supply, marketing, and distribution channels,

such as materials and service sourcing, and product and service sale and delivery; andthe financing, geographical, geopolitical, and regulatory environments in which the entity
operates. (Source IFRS S1 Appendix A)

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