1

CONSULTATION

Transition Plan Taskforce

The Transition Plan
Taskforce Disclosure
Framework
NOVEMBER 2022

2Transition Plan Taskforce

CONTENTS
Preface: About the TPT									61 Introduction										82 Guiding principles: Ambition, Action and Accountability		

9

3 A strategic and rounded approach to transition planning		

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4 The TPT Disclosure Framework							14Glossary of terms										26The 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. Neither the TPT Disclosure Framework nor
any guidance prepared by the TPT is statutory or regulatory guidance, though they may form an input for the developmentof such guidance at a later date. TPT materials are not intended to alter or otherwise affect rights or obligations understatute or regulation. These outputs may nevertheless be informative for entities which are preparing transition plans inaccordance with the Financial Conduct Authority’s (FCA) initial expectations on disclosure of transition plans by asset

managers and FCA-regulated asset owners (ESG 2 in the FCA Handbook), and listed companies (LR 9.8.6 (8) in the FCA
Handbook) in accordance with the guidance from the Task Force on Climate-related Financial Disclosures (TCFD).

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Transition Plan Taskforce

Foreword
Andrew Griffith MP, Economic Secretary
to the Treasury, HM Treasury, Co-chair,
Transition Plan Taskforce.

Amanda Blanc, CEO Aviva Plc,
Co-chair, Transition Plan Taskforce

The UK is already the leading global centre for

In recent years, we have seen a wave of private

and there are opportunities to go further. At

contribute to net zero. The avalanche of statedsustainable finance. But we are not complacent,
COP26, the UK committed to become the world’s
first Net Zero-Aligned Financial Centre. This isa market-led vision centred around financial

institutions and businesses developing their own

practical plans to transition over time to net zero,and then crucially setting these out transparently
to allow the market to make its own informed
judgements.

The Transition Plan Taskforce (TPT) is central tothis. It has brought together a wealth of industry
expertise and existing work to rapidly developa ‘gold standard’ for private sector transition

plans. This will help to connect the impressive
momentum on net zero commitments fromprivate sector firms with the need for good-quality,
accurate and decision-useful information forinvestors.

That’s why I am delighted to co-chair the TPT.

The launch of the TPT Disclosure Framework and
Implementation Guidance is a huge step. The

documents set out clear recommendations forthe preparation and disclosure of high-quality

plans for consultation. The UK Government andregulators have committed to take the TPT’s work
into account when developing future reporting

requirements, and I hope other jurisdictions will dothe same.

I encourage all

stakeholders toprovide feedbackon the documents,
either through theconsultation or the

TPT’s Online Sandbox,

where firms preparing
transition plans canroad-test the TPT’s
outputs.

companies announcing their ambitions tocommitments is excellent progress. We now needfinancial firms and companies to come forwardwith high quality plans to show how they will meettheir targets. At Aviva, we announced our own

intention to be a net zero company by 2040 in 2021
and published our first plan earlier this year.
Transition plans are a key building block fordelivering a net zero future. High quality plans will
support leadership teams through a complex
transformation and open a dialogue withgovernments about the policy action that isrequired to support the private sector in delivering

on climate objectives. Strong plans allow investors,
governments and NGOs to hold company

leadership to account, and support investors tobest allocate capital to support the transition.
This is why the work of the TPT is so important.

Building on the excellent work done by both GFANZ
and the ISSB, the TPT Disclosure Framework will
help ensure that everyone has a shared andconsistent understanding of what is needed. I am
thrilled to co-chair the Taskforce and encourage

anyone who is serious about contributing to a low
carbon future, to engage with our outputs andunderstand how they can help your progress.
I urge all those that are

preparing 2023 transition
plans to sign up for the
TPT Online Sandbox
and give feedback

directly. Transparency
and collaboration are
fundamental to thesuccessful transition to
net zero and climate

resilience. Together, wemight just crack this.

4Transition Plan Taskforce

TPT FRAMEWORKThe drafting of this Framework was led by the Disclosure Framework Workstream of the Transition
Plan Taskforce, with input from the TPT’s Delivery Group and Steering Group and support fromthe TPT Secretariat. The TPT would like to thank the co-chairs of the Workstream, Chris Stark (Chief
Executive, Climate Change Committee) and Matt Scott (Senior Director, Willis Towers Watson),as well as all members of the Steering Group, Delivery Group and Workstream, which included
representatives from:
Aldersgate Group

Impact Investing Institute

Aviva Plc

Impax Asset Management

Bank of England (Observer)

Investment Association

UK Department for Business Energy andInternational Sustainability Standards

British Standards Institution

Just Climate

Canada Pension Plan Investment Board

Legal & General Investment Management

CCLA

Linklaters

CDP

London School of Economics

Chapter Zero

London Stock Exchange Group

Church of England Pensions Board

NatWestClimate Change Committee

National Employment Savings Trust

Climate Safe Lending Board

Organisation for Economic Cooperation

Industrial Strategy (Observer)

Financial Conduct Authority
Glasgow Financial Alliance for Net Zero
Green Finance Institute
HM Treasury
Institute of Chartered Accountants ofEngland and WalesThe Institutional Investors Group on

Board (Observer)and Development (Observer)Ørsted UK
Phoenix Group
ShareAction
UnileverWorld Business Council on Sustainable
Development

Climate ChangeThis document does not necessarily represent the views of individual taskforce members or theirorganisations.

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Transition Plan Taskforce

Preface: About the TPT
BACKGROUND & RATIONALE

The UK has set itself ambitious and legally

support multiple benefits, including creating

emissions to net zero by 2050, with binding

targets, allowing entities to communicate thebinding 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, in the context that nearly

every country has also announced targets totransparency and accountability around net zeropolicy changes that they require to deliver on theirclimate ambition, and enabling investors to makesmarter capital allocation decisions.

reach net zero emissions around the middle ofthe century under the Paris Agreement.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 climatetransition plans. 2 At COP26, the UK Chancellor

further committed to work towards the UK

becoming the world’s first net zero aligned

financial centre and ensuring that financial
flows shift towards supporting a net zeroeconomy.3 The Chancellor also set out that the
UK will move towards making publication oftransition plans mandatory.

At COP26, the UK Chancellor
further committed to work
towards the UK becoming
the world’s first net zeroaligned financial centre andensuring that financial flows
shift towards supporting a
net zero economy.

These developments create a new operating
context for the private sector. A growing

number of entities have already announced

net zero targets and other climate pledges. As
of June 2022, around 702 companies from theForbes 2000 list have announced a net zerotarget.4 But early plans have varied in quality

and often lack detail on the short-term actions
that are being taken to achieve these targets.
This makes it difficult to assess the credibilityof individual plans, or to compare approaches
to transition planning across multiple entities.
The Transition Plan Taskforce (TPT) will makerecommendations to inform the UK’s regulatory
requirements on transition plan disclosures.
These outputs aim to enable entities todevelop robust and credible plans. They will

1) See UK Climate Change Act 2008 and the UK’s Nationally Determined Contribution, as updated September 2022
2) See Greening Finance: A Roadmap to Sustainable Investing, October 2021
3) See Fact Sheet: Net Zero-aligned Financial Centre
4) See Net Zero Stocktake 2022, June 2022

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THE TRANSITION PLAN TASKFORCEThe Transition Plan Taskforce (TPT) was launched• TPT Implementation Guidance: The TPT has alsotransition plans, encouraging entities to back up

preparers of transition plans. This is also open

on 25 April 2022. It will develop a gold standard fortheir targets with rigorous and credible short-term

actions. The TPT has a two-year mandate, bringing
together leaders from industry, academia, andregulators, and coordinating with international
efforts, such as the International Sustainability

Standards Board (ISSB) and the Glasgow Financial
Alliance for Net Zero (GFANZ). The TPT Terms ofReference and information on the membershipof the TPT’s Steering Group and Delivery Groupand their responsibilities can be found on the TPT
website.

launched Implementation Guidance to support
to consultation until 28 February 2023. The final

version will include further guidance such as casestudies and examples of good practice.

• Sandbox: The TPT has launched a sandbox inwhich it will work with preparers and users toroad test the TPT’s outputs and gather practicalfeedback from the market. The findings from thisexercise will inform the final iteration of the TPT

Disclosure Framework, Implementation Guidanceand sector guidance.

• Sector guidance: In 2023 the TPT will publish
a range of sector guidance, starting with

TPT outputs:• TPT Disclosure Framework: This draft of the
Framework will be open to consultation until

28 February 2023. The TPT will then reflect on

feedback received with a view to finalising theframework in 2023.

an overview of sector-specific metrics fromexisting guidance which can supplement

the recommendations of the TPT Disclosure

Framework. More detailed sector guidance will be
published later in 2023, building on best practiceguidance and new research.

8Transition Plan Taskforce

TPT Implementation Guidance
1. INTRODUCTION
The aim of the TPT Disclosure Framework is to assist entities to disclose credible, useful, and consistenttransition plans. The Framework builds on the existing recommendations to disclose transition

plans under the TCFD Recommendations5 and accompanying guidance6 as well as transition plan

disclosure recommendations in the ISSB’s proposed standards.7 The Framework builds on these existing

recommendations by providing specificity and granularity on what UK transition plans should include.

Definition of a transition plan
A transition plan is integral to an entity’s overall strategy, setting out its plan to contribute to andprepare for a rapid global transition towards a low GHG-emissions economy. 8,9

A good practice transition plan should cover:a.	an entity’s high-level ambitions to mitigate,
manage and respond to the changing

climate and to leverage opportunities of thetransition to a low GHG and climate resilient
economy. This includes GHG reduction
targets (e.g., a net zero commitment);b.	short-, medium- and long-term actions theentity plans to take to achieve its strategic
ambition, alongside details on how those
steps will be financed;c.	governance and accountability

mechanisms that support delivery of theplan and robust periodic reporting; andd.	measures to address material risks to,and leverage opportunities for, the naturalenvironment and stakeholders such as theworkforce, supply chains, communities,

or customers which arise as part of theseactions.

This document lays out:• T
 hree guiding principles: Ambition, Action and Accountability• A strategic and rounded approach to transition planning• The TPT Disclosure Framework

5) TCFD. Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures, October 2021
6) TCFD, Guidance on Metrics, targets and Transition Plans, October 2021
7) ISSB, Exposure Draft IFRS S1 and Exposure Draft IFRS S2, March 2022
8) In a manner that is consistent with its constitutional documents and the duties of its directors and senior managers.
9) Transition plans should reflect the urgency to act. An entity’s transition plan should therefore be informed by both national commitments and the latest
international agreement on climate change. This should also include relevant commitments made by jurisdictions in which the entity operates (i.e. Nationally
Determined Contributions submitted under the Paris Agreement). For entities headquartered in the UK, this means that a transition plan should explain how
the entity has taken into account the UK’s legal commitment to reducing GHG by at least 100% of 1990 levels (net zero) by 2050 and the interim targets definedin the Sixth Carbon Budget.

9Transition Plan Taskforce

2. GUIDING PRINCIPLES: AMBITION, ACTION AND ACCOUNTABILITY
The TPT Disclosure Framework is grounded in three guiding principles “Ambition”, “Action” and “Accountability”. The
Framework encourages an ambitious approach, which emphasises concrete short-term action. It also supports

greater accountability to stakeholders for delivery of the plan, especially through effective reporting on progress.
These three principles were drawn from the emerging literature on transition planning and from stakeholder
feedback received in response to the TPT’s Call for Evidence in May 2022. They aim to provide a usefulstructure to preparers as they design, develop and deliver their transition plans. They are also intended tosupport users by providing a lens through which to assess disclosed transition plans.

The three principles to guide a credible transition plan are explored in further detail below.

1.	“Ambition” – Contribute to andprepare for a rapid and orderly
economy-wide net zero transition.

2.	“Action” – Focus on concrete
actions which emphasise theshort-term and strive for resilience.

	A transition plan should outline ambitious

	A transition plan should translate ambitious

objectives and priorities for contributing to andpreparing for a rapid and orderly economywide net zero transition. The plan should

cover the whole entity, consider the full rangeof levers that the entity has available, andemphasise actions that can be expected tomake significant contributions to an economywide transition. This implies that any emissions
reduction target should consider Scope

1, 2, and 3 emissions and should prioritise

decarbonisation through direct abatement

over purchasing carbon credits. A plan should
include any transition-relevant actions which

are material to the entity’s long term enterprisevalue. An entity should therefore examine allmaterial interdependencies, including thosethat relate to the natural environment, workers,
suppliers, communities, and consumers.

Transition plans should reflect the urgency toact. An entity’s transition plan should therefore
be informed by both national commitments
and the latest international agreement on
climate change.

strategic objectives into concrete steps tobe taken in the short- and medium-term. A

transition plan is integral to an entity’s overall

strategy. As such, it should be connected to theentity’s business and operations planning andthe financial accounts and underpinned byclearly articulated resourcing plans. An entity

should develop its plan on the basis of definedassumptions and an analysis of dependencies
and uncertainties. It should assess thesensitivity of the plan to changes in theseassumptions and seek to mitigate delivery risks
where possible.

3.	“Accountability” – Enable delivery of
the plan through clear governancemechanisms along with consistent,
comparable and decision-usefulreporting and verification.
	Delivery of a transition plan should be

supported by robust governance mechanisms,
including Board and executive oversight, with
relevant and appropriate incentivisation,

reporting and accountability structures. The
actionable steps set out in the transition

plan should be underpinned by quantified

A transition plan should
translate ambitious
strategic objectives into
concrete steps to be taken in
the short and medium-term

and timebound metrics and targets that arereported against on an annual basis, within

general purpose financial reporting. Entities
should be transparent about the degree towhich transition plans are subject to externalverification or assurance and should seek andtake account of feedback from key stakeholders
on an ongoing basis.

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3. A
 STRATEGIC AND ROUNDED
APPROACH TO TRANSITION PLANNING
Achieving an orderly economy-wide transition to net zero will require all economic actors to develop

a strategic and rounded approach to transition planning. Climate change presents foreseeable risks,
together with opportunities, in every sector of the economy including but not limited to high-emitting

firms. Actions taken today by the private sector will determine the size and scale of future risks, and thepace of the economic transition to net zero.

The TPT recommends that entities consider astrategic and rounded approach to the design,development and disclosure of transition plans.
There are three inter-related channels throughwhich an entity can take a strategic and rounded
approach:

1

		

2

Decarbonisation: the actions the entity

is taking to reduce its GHG gas emissions,
reduce its impact on the climate andalign with net zero. For example, reducing
Scope 1, 2 and 3 emissions.

	Responding to climate-related risks andopportunities: the actions the entity is
taking to respond to the physical andtransition risks, and the opportunities
that arise from a changing climate
and the transition to a net zero3

Decarbonisation

economy.10

Transition Plans

Responding toclimate-relatedrisks &
opportunitites

	Contributing to economy-wide

transition: the actions the entity is

taking, consistent with its constitutional

documents and the duties of its directors
and senior managers, to use levers it hasavailable to help embed and accelerate

Contributing toeconomy-wide transition

the transition, and, in so doing, to minimise

future risks and protect and enhance longterm value.

Figure 1: The three channels of astrategic and rounded approach10) As discussed by the UK’s Climate Financial Risk Forum, the financial climate-related risks and opportunities that arise to an entity are not necessarily
correlated with its carbon-intensity or other carbon-related non-financial metrics (see e.g., the 2021 CFRF Report on Climate Data and Metrics). This implies
that an organisation may take other actions, beyond decarbonising their own operations, to manage their risk exposure and contribute to a whole ofeconomy transition.

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Transition Plan Taskforce

A strategic and rounded approach will address

Scope 3 emissions by rebalancing portfolios tofocus on net zero targets, such as the “paper

high-carbon assets. These actions may achieve

potential unintended consequences of an exclusive
decarbonisation” of investment portfolios withlimited real-world impact. It can also help to drivea whole-of-economy response which is inclusiveof entities that often report relatively low emissions
but enable and accelerate the transition, such as
the services sector.

In some cases, there may be considerable overlap

or interdependency between these three channels.
For example, by improving the carbon efficiency
of its operations and transforming its businessmodel to align with a pathway to net zero by 2050, ahigh-emitting entity may reduce its GHG emissions,manage the risks and opportunities from climatechange and contribute to an accelerated transition.
In other instances, there may be trade-offs. For

example, a financial institution could reduce its

favour lower-emitting companies, divesting from“paper decarbonisation” for that institution, butthey will not always contribute to actual reductionsin global GHG emissions. Equally, entities that are

pursuing strategies linked to innovation in climate
solutions in hard-to-abate sectors, or that aresupporting a managed phase-out of high-carbon
assets, may fail to deliver a material reductionin their attributed Scope 1, 2 or 3 GHG emissions
in the short-term or relative to industry peers.

Nevertheless, they may be contributing materiallyto the economy-wide transition.

The accompanying Implementation Guidance
provides detailed guidance to help preparers
develop and disclose credible, impactful andconsistent transition plans in line with such a
strategic and rounded approach.

A strategic and rounded approach will address potential
unintended consequences of an exclusive focus on net
zero targets, such as the ‘paper decarbonisation’ ofinvestment portfolios with limited real-world impact.

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Transition Plan Taskforce

Summary recommendations: Disclosing a transition plan
The accompanying Implementation Guidance

provides granular guidance on how and whereentities should report on their transition plans.

Below is a summary of the core recommendations.
How transition plans fit into existing andemerging guidance• Going forward, it is anticipated that existing

TCFD-aligned disclosure rules in the UK will be

replaced by a requirement for certain companies
to disclose in accordance with ISSB standards as
adopted and endorsed for use in the UK.

• The TPT’s recommendations directly build• Under the current UK reporting rules, many large
companies, asset owners and asset managers
are already required by UK regulators and thegovernment to make disclosures aligned with the
TCFD.

• In addition, the FCA has set out initial expectations
on disclosure of transition plans by asseton the existing and emerging guidance on

climate-related risk disclosures, as provided by
the TCFD and the International Sustainability

Standards Board (ISSB), both of which include

recommendations to disclose some information
about an entity’s transition plan.

The TPT has designed its Framework to beconsistent with these building blocks, while

managers, FCA-regulated asset owners andlisted companies in accordance with the TCFD’s
guidance on transition plans.

providing further granularity and specificity to meetthe needs of the UK market.
Latest version - as of 11.10.22 after ISSB comments

Working withThe TPT builds on GFANZ, a voluntary Financial Sector
Initiative which has developed recommendations andguidance to support financial institution and real
economy Net-Zero Transition Plans.

TPT Disclosure
Framework

High-Level Expert Group on the Net-Zero Emissions
Commitments of Non-State Entities, established with theaim to develop stronger and clearer standards for net-zeroemissions pledges by non-State entities – including businesses,
investors, cities and regions – and speed up their implementation.

Provides a gold standardtransition disclosure
framework.
The FCA is involved and will draw
on this work to strengthentransition plan disclosure rules
for listed companies andfinancial institutions.

TCFD

I SSB

Current basis of climate-related
disclosure requirementsin the UK.

Expected future basis of climaterelated disclosure requirements in
the UK, building on the TCFD.

TCFD includes arecommendation to prepare
Transition Plans in the updated
Implementation Annex.

The ISSB’s proposed IFRS S2
Exposure Draft contains
disclosure requirements for anentity to provide information about
its transition plans.

Figure 2: Relationship to other standards.

Location of reporting• Disclosure against the TPT’s Framework should

integrate with, and build from, broader climaterelated disclosures in the reporting entity’s

general purpose financial reports (such as a UK
listed company’s annual report).

• We also recommend that, as well as including
material information related to the transition
plan in general purpose financial reporting,entities publish their transition plan in a single
standalone document that sits alongside theAnnual Financial Report.

• We recommend that entities update thestandalone transition plan periodically, either

when there are significant changes to the plan or,at the latest, every three years.

• In the interim years (Years 1 and 2 in Figure

2 below), progress against the plan and allother content in the plan that is deemed tobe material to investors should be reported

on an annual basis as part of TCFD- or ISSB-aligned disclosures in general purpose financial
reporting (i.e., the Annual Financial Report).

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Transition Plan Taskforce

Year 0Financial Reporting
TCFD or ISSBFirst Transition
Plan Publication

Year 1

Year 2

Material
Information

Material
Information

Transition
planning process

Year 3

Second Transition
Plan Publication

Elements of the

TPT Sector-Neutral Framework
Foundation
Implementation strategy
Engagement strategy
Metrics & Targets
GovernancePublication of material information in
general purpose financial reporting

Publication of standalonetransition plan

Assurance and verification
If an entity obtains assurance or verificationof sustainability information, transition plan
disclosure or wider sustainability reporting,
the TPT would expect to see the following
information disclosed:• the level of assurance or verification
obtained;• the scope of the engagement;• the professional standard(s) against

which the engagement was performed;• who the assurance provider is; and• the outcome of the engagement,

for example, whether the assurance

provider’s conclusion is unqualified or
modified.

Figure 3: The transition plan reporting cycle

Alignment with wider corporate
reporting norms• To maximise alignment, entities should

apply the same corporate reporting norms
to their transition plan disclosures as theywould to their general purpose financial
reporting (e.g., Annual Financial Report).

• For example, entities should approachmateriality in the same way as they do intheir general purpose financial reporting.

This means that they should disclose any
information that, if omitted, misstated, or

obscured, could reasonably be expected toinfluence decisions that the primary usersof general purpose financial reporting

make on the basis of that reporting, which
provides information about a specificreporting entity.

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Transition Plan Taskforce

4. THE TPT DISCLOSURE FRAMEWORKThe TPT’s recommendations are structured around five Elements, which mirror the key components of atransition plan recommended by the GFANZ. Building on this structure, the TPT recommends disclosures inrelation to 19 Sub-Elements which are summarised in Figure 4 below.

Three Layers of the Framework updated 22.09.2022
PRINCIPLES

Ambition

ActionPLANNING
PROCESSDISCLOSURE
ELEMENTSDISCLOSURE
SUB-ELEMENTS

Accountability

Key stages of transition planning

1. Foundation

2. Implementation
Strategy

3. Engagement Strategy

4. Metrics & Targets

5. Governance

1.1 Objectives and priorities

2.1 Business planning andoperations

3.1 Engagement with value
chain

4.1 Governance, businessand operational metrics andtargets

5.1 Board oversight andreporting

1.2 Business model
implications

2.2 Products and services

3.2 Engagement withindustry

4.2 Financial metrics andtargets

5.2 Roles, responsibility andaccountability

2.3 Policies and conditions

3.3 Engagement withgovernment, public sector
and civil society

4.3 GHG emissions metrics
and targets

5.3 Culture

4.4 Carbon credits

5.4 Incentives andrenumeration

2.4. Financial planning

2.5 Sensitivity analysis

5.5 Skills, competencies andtraining

Figure 4: The TPT Disclosure Framework

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Foundation

Disclosure recommendation

Sub-Element

1.

Transition Plan Taskforce

1.1

Objectives and priorities

Describe the strategic ambition of the entity’s transition plan by disclosing its objectives, priorities, interim

targets and milestones for responding and contributing to an early and orderly whole-of-economy transition.
The entity should have regard to reducing its own GHG emissions, responding to its climate-related risks andopportunities, and the actions it may take within its business model to embed and accelerate the transition.

Describe the strategic ambition of the entity’s transition plan by disclosing its objectives and priorities forresponding and contributing to an early and orderly whole-of-economy transition, and interim targets andassociated milestones. This should include:• The entity’s objectives and priorities for reducing its GHG emissions. This should include interim andlong-term targets to reduce GHG emissions over time across emissions Scopes 1, 2, and 3. Interim

GHG reduction targets are defined as 5–10 years from when the target is set. If the entity excludes any
relevant scopes or categories of emissions from its GHG reduction targets, it should state the reason
for omitting these scopes or categories and outline any steps it is taking to enable target-setting forrelevant scopes or categories.

• The entity’s objectives and priorities for responding to the physical and transition risks as well as theopportunities associated with the transition to a net zero economy and the changing climate.

• The objectives and priorities the entity has set, consistent with its constitutional documents and theduties of its directors and senior managers, to use other levers it has available to help embed andaccelerate the transition. These may include objectives and priorities related to investing in low-carbon
technologies, engagement activities, lending, or investment objectives.

In describing the entity’s objectives and priorities, disclose any interim targets and milestones used tomeasure progress.

The entity should also describe any potential trade-offs between these objectives and priorities that the entity

Disclosure recommendation

Sub-Element

has identified.

1.2 Business model implications
Summarise how the entity will embed the strategic ambition of its transition plan in its business model,

highlighting key implications for products and services, resourcing and operational and capital expenditure, as
well as material interdependencies for the natural environment, the entity’s workforce, value chain, impacted
communities and consumers.

Summarise how the objectives, priorities, interim targets and milestones outlined under 1.1 Objectives andpriorities will be embedded in the entity’s business strategy. This should include:• A n overview of the key implications of the transition plan for the entity’s business model, including

implications for products and services, acquisitions or divestments, any high-level implications forresource allocation and operational and capital expenditure, and the timeframe over which key
actions will be taken.

• A summary assessment of the entity’s material interdependencies, including the significant risks

to, and opportunities for, the natural environment and stakeholders such as the entity’s workforce,

suppliers, impacted communities and customers arising from the objectives and priorities outlined
under 1.1 Objectives and priorities.

A summary description of steps that the entity is taking, or planning to take, to mitigate these significant

risks or leverage opportunities for the natural environment and stakeholders such as the workforce, supply
chains, communities or customers.

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Transition Plan Taskforce

Sub-Element

2. Implementation Strategy
2.1 Business planning and operations
Disclose the roadmap of short-, medium- and long-term actions the entity will take to deliver on thestrategic ambition in its transition plan and achieve its stated objectives and priorities, including details of
key planned changes to its business strategy and resource allocation, plans for GHG or carbon energy-

Disclosure recommendation

intensive assets, and its approach to managing material interdependencies.

Disclose the roadmap of short-, medium- and long-term actions (supported by a change managementplan) the entity is taking or plans to take to implement its transition strategy and achieve the priorities andobjectives outlined under 1. Foundations. This includes information on the changes the entity is making in
its business strategy and resource allocation.
This may further include:• plans and timelines to manage or phase-out GHG or carbon-energy intensive assets; and• information about any actions planned to mitigate any significant risks to, and leverage

opportunities for, the natural environment, the entity’s workforce, suppliers, impacted communities
and consumers.

Where possible, quantify the contribution of each business and operational action towards achieving theobjectives and priorities outlined under 1. Foundations. Where quantification is not possible, explain why
this is the case and provide a qualitative description instead.

The entity should disclose what they consider to be the relevant short-, medium-, and long-term time

horizons. The TPT recommends that the short-term is defined as within the next three years. This wouldalign with the recommended publication cycle of standalone transition plans. If the entity defines short-

Disclosure recommendation

Sub-Element

term as exceeding three years, it should provide an explanation for why this is the case.

2.2 Products and services
Disclose planned changes to the entity’s portfolio of products and services to deliver the strategic ambition
in its transition plan, highlighting plans to reduce (increase) the portfolio of high-carbon (low-carbon)
products and services that it provides, either directly or indirectly.

Disclose plans to change the entity’s portfolio of products and services to support the objectives andpriorities and interim milestones outlined under 1. Foundations. This may include plans to reduce(increase) the portfolio of high-carbon (low-carbon) products and services that it provides, either directly
or indirectly.

Where possible, quantify the impact of these planned changes in the portfolio of products and services
towards achieving the company’s objectives outlined under 1. Foundations. Where quantification is notpossible, explain why this is the case and provide a qualitative description instead.

Disclosure recommendation

Sub-Element

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Transition Plan Taskforce

2.3 Policies and conditions
Disclose key internal policies and conditions that the entity has developed to align its activities with thestrategic ambition of its transition plan, and its stated objectives and priorities, including those that relate
to energy and water usage, the management of its impact on the natural environment, lending andinvestment activity and the profile of companies in its supply chain.

Disclose internal policies and conditions that are used to guide business, financial, and operational planning,
and actions. This may include policies related to:• energy usage;• deforestation;• climate-related requirements for suppliers;• climate-related requirements or restrictions on lending and investment activities;• engagement policies; and• safeguards that are in place to address any risk of significant harm to wide range of entities, including thenatural environment, workforce, supply chain, communities or consumers.

Describe how these policies are supporting the objectives, priorities and interim milestones disclosed in 1.

Foundations and/or support actions and plans disclosed in 2. Implementation Strategy and 3. Engagement

Disclosure recommendation

Sub-Element

Strategy.

2.4 Financial planningDescribe the financial implications of the planned changes to the entity’s business strategy, resource

allocation and products and services arising from its transition plan, including relevant financial plans,investment, where possible11.

Disclose how the actions outlined in 2. Implementation Strategy and 3. Engagement Strategy will beresourced, as well as the projected impact of these actions on the entity’s financial position, performanceand cash flows, where possible. This includes:• Information on how it expects its financial position to change over time, given the actions it isplanning to take to support the entity’s objectives and priorities outlined under 1. Foundations. Thisshould reflect current and committed investment plans (including expected capital expenditureneeds) and their anticipated effects on the entity’s financial position, as well as its planned sourcesof funding to implement its strategy.

• Information on how it expects financial performance to change over time, given its strategy toachieve the objectives and priorities outlined under 1. Foundations (e.g., changes in revenues,
operational expenditures).

• Information regarding planned research and development activities for climate solutions.
• Information regarding the use of internal carbon prices, including the levels of prices applied.
The entity should disclose quantitative information unless it is unable to do so. If the entity is unable toprovide quantitative information, it should provide qualitative information.

11) 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 credible resourcing plans to support the implementation of its transition plan.
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.

Disclosure recommendation

Sub-Element

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Transition Plan Taskforce

2.5 Sensitivity analysis
Disclose key assumptions and dependencies underlying the entity’s business, operational and financial plans

and the implications for achievement of the strategic ambition in its transition plan if its central assumptions are
not met.

Disclose the key assumptions underlying the plans outlined under 2.1 Business planning and operations, 2.2

Products and services and 2.4 Financial planning, the timeframes over which these are expected to occur andhow these assumptions are reflected in the company’s financial statements.
This may include key assumptions relating to:• policy and regulatory change;• technological developments;• shifts in client and consumer demand; and• the physical impacts of the changing climate.

Disclose the impact on the ability of the entity to achieve the objectives, priorities and interim milestones outlined
under 1. Foundations if these assumptions prove incorrect.

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Transition Plan Taskforce

Disclosure recommendation

Sub-Element

Disclosure recommendation

Sub-Element

3. Engagement Strategy
3.1

Engagement with value chain

Disclose current and planned engagement activities with companies and customers in the entity’s value

chain or portfolio to provide support and feedback, and to influence behavioural and business model changesaligned with the entity’s strategic ambition and stated objectives and priorities.

Disclose current and planned engagement and activities conducted with both downstream and upstream
entities in the entity’s value chain (e.g. suppliers, distributors, final customers and portfolio companies)

to drive reductions of GHG emissions and/or deliver the objectives, priorities and milestones outlined in 1.
Foundations.

Disclose the expected impact of these engagement activities on the delivery of the objectives, priorities
and milestones outlined in 1. Foundations.

3.2 Engagement with industry
Disclose current and planned engagement and collaborative activities with peers in the entity’s industry (andbeyond, as relevant) to share expertise and experience and address common challenges in support of theentity’s strategic ambition and stated objectives, priorities and interim milestones.

Disclose current and planned engagement and collaborative activities with peers in the entity’s industry(and beyond, as relevant). This should include:• Disclose membership of trade organisations, as well as current and planned engagement with tradeorganisation(s) to influence the trade organisation(s) adoption of transition policies that support theobjectives outlined in 1. Foundations.

• Disclose whether and how the entity ensures that the commitments and actions of the entity’s tradeorganisation(s) support and do not undermine the objectives, priorities and interim milestones
outlined in 1. Foundations.

• Disclose current and planned engagement with other entities (including both peers and otherrelevant entities), and how these engagements support – and do not undermine – the objectives,priorities and interim milestones outlined in 1. Foundations.

Disclose current and planned engagement with industry initiatives; include requirements the company has
chosen to comply with because of these initiatives, and how these engagement activities support – anddo not undermine – the objectives and priorities outlined in 1. Foundations.

Disclosure recommendation

Sub-Element

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Transition Plan Taskforce

3.3 Engagement with government, public sector and civil society
Disclose current and planned engagement activities with the government, public sector organisations andcivil society to support the entity’s strategic ambition and objectives, priorities and interim milestones.

Disclose the entity’s current and planned engagement activities with government, regulators, public sector

organisations and civil society. This disclosure should cover information on both direct climate-related policy
engagements and indirect climate-related policy engagements (e.g., via industry associations).

Disclose how these engagement activities support – and do not undermine – the objectives, priorities andinterim milestones outlined in 1. Foundations.

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Transition Plan Taskforce

Disclosure recommendation

Sub-Element

4. Metrics & Targets
4.1 Governance, business and operational metrics and targets
Disclose the governance, business and operational metrics and targets used by the entity to assess progress
towards its strategic ambition and its stated objectives and priorities. Report against metrics used to assess
progress towards targets on at least an annual basis.

Disclose the governance, business and operational metrics and targets that the entity is using to set theirambition and monitor progress of their transition plan, outlining how these reflect the objectives andpriorities outlined under 1. Foundations and relate to the actions outlined under 2. Implementation Strategy
and 3. Engagement Strategy.

To the extent possible, for each target defined, the entity should disclose:• the objective of the target;• whether this target is an absolute or an intensity target;• the period over which the target applies;• the base period and measurement from which progress is measured;• for medium- to long-term targets, any milestones or interim targets (interim targets are defined as
5–10 years from when the target is set);• the metric used to assess progress towards reaching the target;• the relevant units, methodologies and definitions on which this metric relies; andDisclosure recommendation

Sub-Element• the extent to which these metrics rely on measured vs. estimated data.

4.2 Financial metrics and targets
Disclose the financial metrics and targets that are used by the entity to assess progress towards its strategic

ambition and its stated objectives and priorities. Report against metrics used to assess progress towards targets
on at least an annual basis.

Disclose the financial metrics and targets that the entity is using to set their ambition and monitor progressof their transition plan. The entity should further outline how these reflect the objectives and priorities

outlined under 1. Foundations and relate to the actions outlined under 2. Implementation Strategy and 3.

Engagement Strategy.

For each target, the entity should disclose:• the objective of the target;• whether this target is an absolute or an intensity target;• the period over which the target applies;• the base period and measurement from which progress is measured;• for medium- to long-term targets, any milestones or interim targets (interim targets are defined as
5–10 years from when the target is set);• the metric used to assess progress towards reaching the target;• the relevant units, methodologies and definitions on which this metric relies; and• the extent to which these metrics rely on measured vs. estimated data.

Disclosure recommendation

Sub-Element

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Transition Plan Taskforce

4.3 GHG emissions metrics and targets
Disclose the GHG metrics and targets that are used by the entity to assess progress towards its strategic

ambition and its stated objectives and priorities. Report against metrics used to assess progress towards
targets on at least an annual basis.

Disclose the GHG emissions metrics and targets that the entity is using to set their ambition and monitor

progress of their transition plan. The entity should further outline how these reflect the objectives and priorities
outlined under 1. Foundations and relate to the actions outlined under 2. Implementation Strategy and 3.

Engagement Strategy.
Metrics

Disclosures on GHG emissions metrics should include:• A bsolute gross GHG emissions generated during the reporting period, measured in accordance with

the Greenhouse Gas Protocol Corporate Standard, and Corporate Value Chain Standard expressed as
metric tonnes of CO2 equivalent, classified as Scope 1, 2 and 3 emissions.

• G HG emissions intensity for each scope, expressed as metric tonnes of CO2 equivalent per unit ofphysical or economic output, classified as Scope 1, 2 and 3 emissions.

• The extent to which these metrics rely on measured vs. estimated data.
Targets
Disclosures on GHG emissions targets should include:• absolute gross GHG emissions reduction targets for Scopes 1 and 2;• absolute gross GHG emissions reduction targets for Scope 3;• G
 HG emissions intensity targets expressed as metric tonnes of CO2 equivalent per unit of physical or
economic output for Scopes 1 and 2;• G
 HG emissions intensity targets expressed as metric tonnes of CO2 equivalent per unit of physical or
economic output for Scope 3; and• any additional GHG emissions targets that the entity has set (e.g., methane reduction targets).
For each of the targets above, the entity should disclose:• the objective of the target;• whether this target is an absolute or an intensity target;• the period over which the target applies;• the base period and measurement from which progress is measured;• f or medium- to long-term targets, any milestones or interim targets (interim targets are defined as 5–10
years from when the target is set);• the metric used to assess progress towards reaching the target;• the relevant units, methodologies and definitions on which this metric relies; and• the extent to which these metrics rely on measured vs. estimated data.
For Scope 3 emissions, which are disclosed in accordance with 4.3 GHG emissions metrics and targets:• The entity should include upstream and downstream emissions in its measure of Scope 3 emissions.
• The entity should disclose the categories included within its measure of Scope 3 emissions.
• W hen the entity’s measure of Scope 3 emissions includes information provided by entities in its value
chain, it should explain the basis for that measurement.

• If the entity excludes categories of Scope 3 emissions from its metrics and targets, it should state thereason for omitting them, and any steps it is taking to improve monitoring and reporting systems andenable target setting for relevant Scope 3 emission categories.

Sub-Element

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Transition Plan Taskforce

4.4 Carbon credits
Disclose the intended use of carbon credits which are used by the entity to achieve progress towards theentity’s strategic objectives and priorities, and annually report on the use of carbon credits.

Disclosure recommendation

		
Carbon credit targets
Disclose the entity’s intended use of carbon credits in achieving the objectives and priorities outlined
under 1. Foundations. In explaining the intended use of carbon credits, the entity shall disclose information
including:• Why the entity is employing carbon credits and how the use of carbon credits supports achieving
the objectives and priorities outlined under 1. Foundations.
• What third-party verification or certification scheme or schemes the credits are subject to.
• The type of carbon credit, (e.g., whether the credits are generated from carbon removal vs. emissions
avoidance projects, or whether they are based on natural carbon removals vs. technological carbon
removals).

Carbon credit metrics
Entities should annually report on the use of carbon credits to assess performance against the objectives
and priorities outlined under 1. Foundations. This should include:• The number and cost of credits purchased and retired.
• What third-party verification or certification scheme or schemes the credit was subject to.
• The type of carbon credit (e.g., whether the credits are generated from carbon removal vs. emissions
avoidance projects, or whether they are based on natural carbon removals vs. technological carbon
removals).

• Any other significant factors necessary for users to understand the credibility and integrity of carbon
credits intended to be used by the entity.

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Transition Plan Taskforce

Disclosure recommendation

Sub-Element

5. Governance
5.1 Board oversight and reporting
Describe the entity’s arrangements for Board-level governance of the transition plan, including its processes
for Board-level review and approval of the transition plan, and for the oversight of monitoring and reportingof progress against the entity’s stated objectives and priorities.

Describe the entity’s arrangements for Board-level review and approval of the transition plan, and for theoversight of monitoring and reporting of progress against it. This should include:• A description of the entity’s arrangements and processes for the Board’s approval of the transitionplan.

• Whether and how the arrangements are reflected in the entity’s terms of reference, Board
mandates and other related policies.

• Whether and how the targets are reviewed by the Board and/or a Board sub-committee.
• Whether and how frequently the transition plan is reviewed by the Board and/or a Board subcommittee.

• Whether and how frequently the Board will monitor and receive reports on progress against theplan’s objectives and priorities.

• A description of how the Board considers transition plan Elements in wider strategy, risk

Disclosure recommendation

Sub-Element

management and decision making on resource allocation.

5.2 Roles, responsibility and accountability
Describe senior management roles and responsibilities for the execution of the transition plan, as well as theentity’s wider control, review and accountability mechanisms.

Describe senior management’s roles and responsibilities for the execution of the transition plan, as wellas the entity’s wider control, review and accountability mechanisms. This should include:• The identity of the body or individuals within a body responsible for oversight and delivery of thetransition plan, including the setting and review of targets and monitoring of progress towards
them.

• Whether the transition plan is subject to shareholder approval.
• How relevant corporate procedures, systems and decision-making processes have been amended
to support delivery of the plan.

• An overview of which aspects of the transition plan are subject to external assurance, including the

Sub-Element

nature of the assurance.

5.3 CultureDescribe the steps that the entity has put in place to build a culture aligned with the strategic ambition inits transition plan, including through leadership and training programmes, HR policies and procedures andwider workforce engagement.

Disclosure recommendation

Sub-Element

Disclosure recommendation

Sub-Element

Disclosure recommendation

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Transition Plan Taskforce

Describe any steps that the entity is taking to build a culture that supports the successful implementationof the transition plan. This may include:• Information on actions to review systems, processes, communications, HR policies and procedures(including compensation and benefits), company values, leadership and manager training

programmes and workforce engagement strategies to ensure the culture supports the behaviours
and ways of working needed for the transition.

5.4 Incentives and remuneration
Describe whether and how the entity has put in place arrangements to align remuneration and incentive
structures with the stated objectives and priorities in its transition plan.

Describe whether and how remuneration and incentives for employees are aligned to the objectives andpriorities outlined under 1. Foundations. This should include:• A description of how transition plan-related considerations are factored into executive remuneration,
including:		o t he percentage of executive management remuneration that is linked to transition plan related		o key transition plan-related performance indicators used.

considerations; and5.5 Skills, competencies and trainingDescribe how the entity ensures that it has the appropriate skills, competencies and knowledge across theorganisation to effectively design, develop and deliver the transition plan.

Describe how the entity will ensure that it has the appropriate skills, competencies and knowledge acrossthe organisation to successfully deliver its transition plan. This should include how the entity ensures that
relevant Board members are involved, and that the Board and executive management have or haveaccess to appropriate skills, competencies and knowledge required to provide for effective oversight of thetransition plan.

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Transition Plan Taskforce

Glossary
TermDefinition

Business model

An entity’s system of transforming inputs through its business activities into outputs andoutcomes that aims to fulfil the entity’s strategic purposes and create value over the
short, medium and long-term.12

Carbon credit

A transferable or tradable instrument, representing an emissions reduction or removalof emissions of one metric tonne of CO 2 or an equivalent amount of other greenhousegases, verified according to a recognised quality standard. Carbon credits are uniquely
serialised, issued, tracked and cancelled by means of an electronic registry.

Climate-related
scenario analysis

A process for identifying and assessing a potential range of outcomes of future events

under conditions of uncertainty. In the case of climate change, climate-related scenario
analysis allows an entity to explore and develop an understanding of how the physicalrisks and transition risks of climate change may affect its businesses, strategies andfinancial performance over time.13

EntityAn organisation that that voluntarily chooses, or is required by law, to prepare general

General purpose
financial report

The provision of financial information about a reporting entity that is useful to primary

purpose financial reporting statements

users in making decisions relating to providing resources to the entity. Those decisions
involve decisions about:

1. buying, selling or holding equity and debt instruments;
2. providing or selling loans and other forms of credit; or

3. exercising rights to vote on, or otherwise influence, management’s actions that affectthe use of the entity’s economic resources.

General purpose financial reporting encompasses – but is not restricted to – an entity’s
general purpose financial statements and sustainability-related financial disclosures.
disclosures.14

Greenhousegases

The seven greenhouse gases (GHGs) listed in the Kyoto Protocol–carbon dioxide (CO 2);

Latestinternational
agreement on
climate change

The latest international agreement on climate change is an agreement by states, as

Material
interdependencies

The interlinkages between the actions an entity is taking in order to achieve themethane (CH4); nitrous oxide (N2 O); hydrofluorocarbons (HFCs); nitrogen trifluoride (NF3);

perfluorocarbons (PFCs); and sulphur hexafluoride (SF6).

members of the United Nations Framework Convention on Climate Change, to combat
climate change. The agreements set norms and targets for a reduction in greenhousegases.15

objectives and priorities outlined in its transition plan, and other sustainability-related
matters, including the natural environment and stakeholders such as the workforce,
supply chains, communities or customers. In line with the ISSB IFRS S1 Exposure Draft,
information about those interdependencies are regarded as material if omitting,misstating or obscuring that information could reasonably be expected to influence
decisions that the primary users of general purpose financial reporting make on thebasis of that reporting.16

12) ISSB, Exposure Draft IFRS S2 Climate-related Disclosures, March 2022
13) ISSB, Exposure Draft IFRS S2 Climate-related Disclosures, March 2022
14) ISSB, Exposure Draft IFRS S2 Climate-related Disclosures, March 2022
15) ISSB, Exposure Draft IFRS S2 Climate-related Disclosures, March 2022
16) Based on ISSB, Exposure Draft IFRS S1 General Requirements for Disclosures of Sustainability-related Financial Information, March 2022

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Transition Plan Taskforce

Term

Definition
Definition

Naturalenvironment

The Natural Environment means:(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.17

Scope 1emissions

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

by an entity, for example, emissions from combustion in owned or controlled boilers, furnaces, vehicles or emissions from chemical production in owned or controlled processequipment.18

Scope 2emissionsIndirect greenhouse gas emissions that occur from the generation of purchased elec-

tricity, heat or steam consumed by an entity. Purchased electricity is defined as electricity that is purchased or otherwise brought into an entity’s boundary. Scope 2 emissions
physically occur at the facility where electricity is generated.19

Scope 3emissionsIndirect emissions outside of Scope 2 emissions that occur in the value chain of thereporting entity, including both upstream and downstream emissions. For the purpos-

es of this framework, Scope 3 emissions include the categories outlined within the GHG
Protocol.20

Stewardship

The responsible allocation, management and oversight of capital to create long-termvalue for clients and beneficiaries leading to sustainable benefits for the economy, theenvironment and society.21

Sensitivity
analysisAn analytical tool used to assess how different values of a set of independent variables

affect a specific dependent variable. In the context of transition plans, sensitivity analysis

allows an entity to explore how a potential range of outcomes of future events (including, forexample, policy outcomes, physical and transition risks that arise from the changing climate
and demand shifts) may affect its ability to implement and deliver its transition plan.

Transition plan

A transition plan is integral to an entity’s overall strategy, setting out its plan to contribute toand prepare for a rapid global transition towards a low GHG-emissions economy. 22,23

17) UK Environment Act 2021, Provision 44.
18) ISSB, Exposure Draft IFRS S2 Climate-related Disclosures, March 2022
19) ISSB, Exposure Draft IFRS S2 Climate-related Disclosures, March 2022
20) ISSB, Exposure Draft IFRS S2 Climate-related Disclosures, March 2022
21) Financial Reporting Council, The UK Stewardship Code, 202022) In a manner that is consistent with its constitutional documents and the duties of its directors and senior managers.
23) Transition plans should reflect the urgency to act. An entity’s transition plan should therefore be informed by both national commitments and the latest
international agreement on climate change. This should also include relevant commitments made by jurisdictions in which the entity operates (i.e. Nationally
Determined Contributions submitted under the Paris Agreement). For entities headquartered in the UK, this means that a transition plan should explain how
the entity has taken into account the UK’s legal commitment to reducing GHG by at least 100% of 1990 levels (net zero) by 2050 and the interim targets definedin the Sixth Carbon Budget

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