Transition Finance Mapping
Frameworks to assess corporate transition

Mapping analysis

Climate Bonds Initiative

30 September 2023

INTRODUCTION

Climate Bonds Initiative 2

Context
Over the past 5 years, a category of transition finance has
emerged to facilitate the financing of high emitting entities
that are making a credible transition towards a low carbon
economy as consistent with the Paris Agreement.
Since then, many frameworks have been developed to guidecredible transition and transition finance assessment. There isa high degree of alignment between these frameworks at ahigh level, but their proliferation and their differences at a
detailed level has led to confusion in the market. A further
concern is that much of this guidance cannot easily be utilisedby financial institutions today due to the absence of granular
data and information from corporates.
This is slowing investment into sectors and companies that
demonstrate real promise and progress with the climatetransition.
In this document, the Climate Bonds Initiative, in consultation
with IIGCC, SMI and funded by Climate Arc, has mapped thedegree of alignment of 13 corporate transition frameworks
and highlighted areas where further work and alignment isneeded.

It is part of a broader initiative to help asset managers and asset
owners navigate the analysis of their investment portfolios in thetransition to net zero, in order to accelerate the allocation ofcapital to corporates at different stages of the transition and,ultimately, support the progressive decarbonization of highemitting assets while avoiding greenwashing.
It also aims to build consensus around across existing corporatetransition frameworks.
The next phase of work is to develop a practical tool for allocating
corporates in investment portfolios to appropriate categories oftransition, to support effective engagement strategies.
The first iteration of this tool is expected to be shared in January2024 for market testing, with a second, refined iteration following
as needed to reflect the lessons from that testing.
This is a collaborative effort from Climate Bonds Initiative, theInvestor Group on Climate Change (IIGCC), the Sustainable
Markets Initiative (SMI) and Climate Arc with methodologicalfeedback from GFANZ and representatives from the investment
world.

Guide to the deck
The ability to categorise and monitor corporates’ progress through their transition will be key for
financial institutions in their capital allocation decisions, corporate engagement strategies anddelivery of their own transition ambitions. This will require an understanding of a corporate’s
transition journey from the development of commitments and transition plans to theimplementation of the plan to delivery of substantial emissions reductions.
Corporate transition plans are the primary indicator of the ambition and credibility of thecorporate’s forward-looking transition targets and actions, and their ability to deliver them.
To understand how existing guidance is aligned, we analyzed 13 corporate transition frameworks,
relating to either transition categories and/ or transition plans. These slides summarise the resultsof that analysis, identifying:•

Broad similarities and notable differences across frameworks;•

Gaps in the guidance that will need to be filled to further assist corporates disclosing andfinancial institutions assessing corporate transitions;•

Opportunities for ‘easy-wins’ for greater alignment and consistency between the reviewed
frameworks.

The icons alongside are used to signpost this information

Key

Broadly similar

Notable differences

Guidance gap to be filled

Harmonisation easy-win

Additional noteFrameworks reviewed and their role in the ecosystem
Primary actors in the ecosystem

1.
Corporates

Develop thenimplement
transition plans
to deliveremissions
reductions

2.
Assessors

Provide second
party opinions(SPOs) or giveassurance overtransition plandevelopment
and delivery

3. Financial
institutions

Guidance providers on corporate transition reviewed for this analysis*
Regulators

Data providers

Establishing voluntary and/ or mandatory corporatetransition plan disclosure requirements• EU: European Sustainability Reporting Standard (ESRS)• G20• UK: Transition Plan Taskforce (TPT)
Data and/ or analysis of corporate transitions• Climate Action 100+ (CA100)• CDP• Transition Pathway Initiative (TPI)

Networks of financial
institutions

Assessment schemes/
standard providers

Align theirportfolios tosatisfy theirown transitionplans* See slides 23-24 for further details
on the frameworks reviewed,
including their primary purpose.
Market-led expectations or guidance for corporates• Glasgow Financial Alliance for Net Zero (GFANZ)
Assessment
scheme /Association (ICMA)• International
Capital Markets
standards
providers• Institutional Investors Group on Climate Change (IIGCC)• Sustainable Markets Initiative (SMI)
Independent standard setters (and in some cases also
assessors) for corporate transitions• Climate Bonds Initiative’s Climate Bonds Standard (CBI)• Science Based Targets Initiatives Net Zero Standard (SBTi)• World Benchmarking Alliance’ Assessment of Low Carbon
Transition (ACT)Key messages and where to find the supporting analysis
Keymessage slideCorporatetransition
categories

Credible
corporatetransitionplans

Supporting
slides inAppendix*

Overview of key messages on corporate transition categories

8

Corporate transition planning and implementation can be broadly classified into five or six
categories

9

Three of these categories are credible inclusions in a corporate transition portfolio

10

For all corporates, rapid movement is needed through these categories

11

Financial institutions may choose to prioritise hard-to-abate sectors in the near term

12

A shared understanding of what a transition plan is and what it should contain to be credible

14

25

Commonality in the principles underpinning a credible transition plan but variation ininterpretation

15-19

27-45

Guidance on how to integrate other social and environmental aspects into a decarbonizationtransition plan is limited and variable2046

Guidance on how to assess a corporate with disaggregated targets and delivery strategies tailoredto different activities of the business is limited and variable

21

47*The Appendix provides further insight into the mapping analysis undertaken, to support the key messages and provide greater insight to users
around exactly how the frameworks differ in key aspects

KEY FINDINGS: Guidance on corporate transition categories

Summary of corporate transition categories
Area

Broadly similar

Notable differences

Guidance gap to be filled

Harmonisation easy
win

• The labels proposed forthese categories• Refined categories that
capture the dynamic natureof a corporate’s transition• Consistent labelling ofthese categories ofcorporate transition

Alignment on
categories• Six categories capture thestages of corporate transitions

Credible inclusions
in a corporatetransition portfolio• Three categories are credible
inclusions in a corporatetransition portfolio

Pace of movement
through the transition
categories• All corporates need to move
rapidly through thesecategories• Corporates can pursue any
combination of three nonexclusive strategies to do so• Clarification of the desired
speed of movement throughcategories• Agreed list of stranded andinterim activities

Financial institution
prioritisation• Transition finance should be
inclusive, but financial
institutions may chose to focus
attention on high-emitting
corporates and sectors in thenear term• Clarification of transition
plan expectations forcorporates already near zero
emissions• Agreed list of activities towhom alternative
expectations may apply
Climate Bonds Initiative 8Key message 1 Corporate transition planning and implementation
can be broadly classified into five or six categories
Stages of corporate transition planning and implementation

2. Commitment
to Paris goals(and someaction)1. No
commitment toParis-aligned
pathway / Parisgoals

3. Credible plan(emission targets
and delivery
strategy) to alignwith Paris-aligned
goals and pathway

4. Already on
Paris-aligned
pathway &credible plan toreach Paris goals

5. Already near
net zeroemissions

6. Already net
zero emissions

naturee.g.:

Refined categories that
capture the dynamicof transition to address• Companies that do not have atransition plan but are alreadytaking action to reduce emissions• Companies that are advanced
regarding decarbonization but havenot integrated wider social orenvironmental considerations likejust transition

Labels proposed to capture these categories
CBI

-

-

Transition

AlignedAlignedAlignedSMI-

Aiming toTransition

Committed toTransition

Transitioning

Transitioning

-

IIGCC

Not aligned

Committed to
Aligning

Aligning Towards a
Net Zero Pathway

Aligned to a Net
Zero Pathway

Achieving Net
Zero

Achieving Net
Zero

GFANZ

-Presentation title-

Aligning

AlignedAligned-Labelling of the categories
of corporate transition

Key message 2 Three categories are credible inclusions
in a corporate transition portfolio*
Boundary of a credible transition portfolio

1. No
commitment toParis-aligned
pathway / Parisgoals

As not doing
anything to meritinclusion

2. Commitment
to Paris goals(and someaction)As commitments
alone are notsufficient for acredible transition

3. Credible plan(emission targets
and delivery
strategy) to alignwith Paris-aligned
goals and pathway

4. Already on
Paris-aligned
pathway &credible plan toreach Paris goals

5. Already near
net zeroemissions

6. Already net
zero emissions

As these corporates
are ‘out of’ transition* This question of inclusion in transition portfolios is not fully drawn out in the frameworks reviewed. Hence this conclusion is drawn from thecollective view of the organisations consulted for this analysis.

Key message 3 All corporates need to move rapidly throughthese categories
Corporates with all types of activities need totransition•••

Strategies to drive transition

Higher emitting activities that can be but have notyet been decarbonized; andLower emitting activities that nonetheless need togo the ‘last mile’; andStranded or interim activities that cannot be partof a net zero economy•

Ramp up climate solutions; and/ or•

Decarbonise activities that have a feasible
pathway to net zero; and/ or•

Phase out stranded and interim activities

Which strategy, or combination of strategies, pursued by the
corporate will depend on the nature of their activities and how they
N.B. This includes activities enabling activities that are higher emitting, choose to reorientate their business to achieve net zerostranded or interim. These should not receive special treatment due toAgreed list of stranded and interim activities (withtheir ‘enabling service’associated sunset dates). To guide transition
strategies and assessment of those strategies

1. No
commitment

2.
Commitment

3. Credible
plan (emission
targets anddeliverystrategy)

4. Already on
Parisaligned
pathway

5. Alreadynear netzero
emissions

6. Alreadynet zeroemissions

Clarification of the desired speed of movement throughcategories. To ensure decarbonization is started and scaledup sufficiently rapidly to meet the goal of halving global
emissions by 2030. And to inform the goals of financial
institutions’ corporate engagement strategies.

Key message 4 Financial institutions may choose toprioritise hard-to-abate sectors in the near termFirst steps to economy wide net zero transition plans•

All corporates should disclose a plan for how they will transition to net-zeroemissions if they are not already there•

All corporates whose plan is ambitious and credible should be able to accesstransition finance products or services•

However, financial institutions may prioritise transition plan assessment andcorporate engagement on corporates in high emitting sectors in the near term, toget more substantial and rapid transaction on material emissions in their portfolio•

However, looking to the longer term, financial institutions should aim to broaden
assessment and engagements to all corporates in their portfolio

Clarification of transition
plan expectations forcorporates already nearzero emissions Could these
corporates prepare a simplified
transition plan for ‘the last mile’ ordo they still need a fully fledgedtransition plan?
Agreed list of economic activities
that are inherently ‘near zero
emissions’ to identify those
corporates that might be subject toany special provisions i.e., inherently
low-emitting technologies andservices that replace high-emitting
technologies or services* This question of initial focus is not fully drawn out in the frameworks reviewed. Hence this conclusion is drawn from the collective view of theorganisations consulted for this analysis.

KEY FINDINGS: Guidance on credible, corporate transition plans

Key message 5 Shared understanding of what a transition
plan is and what it should contain to be credible
A transition plan is•

A time bound action plan setting out a set of targets, delivery strategy and accountability mechanisms totransition an organization’s business activities toward a low-carbon economy•

Part of and aligned with the organization’s overall business strategy• Emissions
metrics & targets
Other• Business andoperational
metrics & targets• Financial metrics& targets• Objectives,priorities andbusiness model
implications
Implementation• Business planningand operations• Financial planning• Engagement
within value chain• Engagement
outside of value
chain• Sensitivity analysis

Internal governance• Board and senior
executive roles andresponsibilities• Remuneration• Monitoring andresetting transition
plan
Externaltransparency• Disclosure• Verification

Accountability mechanisms

EmissionsTargets

Foundation

Delivery strategy

The key components of a transition plan are
Elements not present in all
guidance include engagement
beyond the value chain,organizational culture and skills, linked
remuneration, internal policy alignment
Elements may not be covered ina particular framework due to adifferent focus or use of thatframework, not a belief that the element
is not important. Slide 25 gives a summaryof the scope of the frameworks reviewed

Key message 6

Commonality in the principles underpinning credible targets,delivery strategy and accountability mechanisms…but variation in interpretation

A note on slides 16-19: The principles listed on these slides have been drafted based on our analysis of thewording and intent of the frameworks reviewed

Targets
See slides 27-32 for further details

PRINCIPLE 1.1 Emissions targets align with theParis Agreement

Significant agreement

1.1.1. Corporates’ long-term emissions goals align with the goals of theParis Agreement
1.1.2. Emissions targets cover the short-, medium- and long-term
1.1.3. Interim emissions targets are sufficiently frequent to enable
reporting and monitoring of progress over time

Significant variation• The recommended end goal of thecorporate transition• Inclusion of short- and mediumterm emissions targets

1.1.4. Emissions targets do not exclude substantial portions of emissions
1.1.5. Emissions targets maximise own actions and minimise offsets• The inclusion of long-termemissions targets• The inclusion & frequency ofinterim emissions targets• Inclusion of scope 3 emissions• Definitions of materiality• The role of offsets

1.1.6. Emissions targets use comparable, impactful metrics• A recognized set of key,comparable emissions metrics• Which of these are primary (andtherefore the roles of each)

1.1.7. Emissions targets are benchmarked against scientific sectoral
pathways/ benchmarks
1.1.8. The selected benchmark may be global or regional
1.1.9. Emissions targets align with the selected benchmark sufficiently
rapidly to avoid contributing to overshoot• The need to benchmark emissions
targets against credible sciencebased pathways• Recommended pathways tobenchmark against• The timeframe for alignment withthem
• Factoring in of cumulativeemissionsTargets
See slide 33 for further details

PRINCIPLE 1.2 Trackable operational & financial
targets are identified
1.2.1. Action plans are trackable
1.2.2. Finance plans are trackable

Significant agreement

Significant variation• Need for inclusion of trackable
operational and financial targets• Appropriate operational metrics
will depend on the corporate andtheir activities (examples are
given)• Appropriate financial metrics are
more standardized for all
corporates (common examples
are given)• The inclusion of long-termemissions targets• The inclusion & frequency ofinterim emissions targets

Delivery strategies
See slides 34-39 for further details

PRINCIPLE 2.1 Clear objectives and priorities Significant agreement
provide a strong foundation for the transition
2.1.1. The transition goal and strategy is clear and coherent

Significant variation• Key information that enables sufficientinsight into the vision and strategy

Significant agreement
PRINCIPLE 2.2 A comprehensive
implementation plan underpins the transition

Significant variation

2.2.1. Action plans are comprehensive and consistent with theemissions targets
2.2.2. Action plans are backed by robust evidence• Key information that enables sufficientinsight into the action plan, recognizingthat details will vary by corporate
circumstance• Consideration of the required
evidence base to support thereasonableness of the delivery strategy

2.2.3. Finance plans cost out the transition and address thewider financial impacts for the corporate• The finance plan is a core component of thetransition plan
• Key financial indicators to convey the direct
costs of the transition• Coverage/ selection of key financial
indicators to convey the wider
financial impacts of the transition• Encouragement that key transition
information is fully reflected infinancial statements

2.2.4. External engagement beyond the value chain is part of thedelivery strategy• The need for wide external engagement

2.2.5. Key assumptions and external factors on which thetransition plan depends are identified
2.2.6. Internal policies enabling delivery of the transition plan are
identified• The need to identify key assumptions andexternal factors on which the plan depends• Transparency over the internal policies
enabling the transition

Accountability mechanisms
See slides 40-45 for further details

PRINCIPLE 3.1 Strong internal governanceoversees delivery of the transition

Significant agreement

3.1.1. The Board have oversight and ownership of the transition
and the senior executive responsibility for managing
implementation
3.1.2. Remuneration is linked to the objectives of the transition
3.1.3. Tools and procedures in place for tracking progress andtaking corrective action where needed
3.1.4. The targets and delivery strategy are regularly reappraised

The need for and transparency over:• Board expertise on climate change and Board
responsibility for of transition plan sign off &implementation• Senior executive management of transition
implementation• At minimum, disclosure of linked remuneration• Regular review and reset of the plan

PRINCIPLE 3.2 Disclosure enables external
stakeholders to assess the transition

Significant agreement

3.2.1. Sufficient disclosure around the transition plan overall, andemissions and non-emissions targets specifically• The need for detailed transition plan
disclosure

PRINCIPLE 3.3 Independent evaluation of
the transition planSignificant agreement

Significant variation• The need for independent assessment of pastemissions and emissions targets• The need for independent
assessment of the whole
ClimateBonds Initiative 19transitionplan

3.3.1. The transition plan is independently assessed
3.3.2. A high standard of assessment is followed
Presentation title

Significant variation

Significant variation

Key message 7 Limited and variable guidance on how tointegrate non-climate mitigation aspects into a
decarbonization transition plan
Boundary of decarbonization transition plan guidance
Ideally the decarbonisation transition will be compatible with simultaneously meeting the Sustainable
Development Goals and be a Just Transition. However, guidance on integrating other aspects in thetransition plan is limited:•

Half of the frameworks focus exclusively on decarbonisation•

Half address a Just Transition•

Just less than half address other environmental and social goals (predominantly only the naturalenvironment or nature-based solutions)

See slide 46 for further details

Agreed guidanceon whether andhow toincorporate nonmitigation aspects into a
decarbonizationtransition plan – andassociated minimum
integration requirements

Approaches to integrating other social and environmental factors•

The majority focus on encouraging the corporate to identify how they will manage the impact of the decarbonisationtransition on the selected other social and/or environmental goals i.e., they focus on managing downside risk.

•

Only one promotes the setting of proactive performance targets for a Just Transition, though another looks for the corporate
to have a broader sustainability strategy addressing Just Transition considerations•

Only one looks for a broader corporate sustainability strategy to mitigate relevant environmental and social externalities andcontributions to the SDGs

Key message 8 Limited and variable guidance on how toassess a corporate with disaggregated targets and delivery
strategies tailored to different activities of the businessSee slide 47 for further details

Boundary of decarbonization transition plan guidance•

All frameworks encourage transition plan setting for the whole corporate entity – either
through aggregated emissions targets encompassing all the corporate’s activities, ordisaggregated targets to reflect the diverse activities of the corporate•

A minority also support transition plan setting for only part of the corporate (particularly
assessment schemes that may not be able to benchmark and assess the emissions targets
for all the activities of the corporate)•

However, few frameworks explicitly address how to ‘aggregate’ back up to a corporatelevel assessment where transition plans have been developed on a disaggregated basis,
and approaches that have been proposed are not consistent

An agreed
methodology for
determining acompany’s overall transition
status and transition plancredibility when that
corporate has developed
disaggregated emissions
targets and deliver strategies
for different business activities

APPENDIX: Frameworks reviewed and individual mapping results

Regulation focused

Financial institution-led initiatives

Frameworks reviewed – part 1
ORGANISATIONFRAMEWORK REVIEWEDGlasgow
Financial Alliancefor Net Zero
(GFANZ)International
Capital Markets
Association(ICMA)
Institutional
Investors Groupon Climate
Change (IIGCC)
Sustainable
Markets Initiative(SMI)

Expectations for real-economy transition
plans, September 2022

EuropeanCommission

Referencein thisdocument
GFANZ

Climate Transition Finance Handbook, June
2023

ICMA

Investors expectation of corporate transition
plans: from A to Zero, March 2023

IIGCC

A framework to define a transition category
for investors, July 2022

SMI

ESRS E1

G20

European Sustainability Reporting Standard(ESRS), Disclosure Requirement E1-1:
Transition plan for climate change mitigation
G20 Sustainable Finance Report, 2022

Transition Plan
Taskforce (TPT)The Transition Plan Taskforce Disclosure
Framework,October 2023

TPT

G20

A note on the primary purpose of the framework
To inform real-economy companies of the expectations of the net
zero-committed financial sector for real-economy transition plans,
highlighting the information most relevant to financial institutions
tracking progress to meet their own 1.5 degrees Celsius targets
Guidance and expectations on issuers raising funds for their climatetransition strategy whether via Use-of-Proceeds bonds or
Sustainability-Linked Bonds. To be used in conjunction with e.g., theGreen Bond Principles and Sustainability-Linked Bond Principles
Framework establishing what constitutes a credible corporatetransition plan consistent with the needs of institutional investorsaligning their portfolios to the 1.5 degrees celsius goal, consistent withthe requirements of the Net Zero Investment Framework.
Framework for investors to identify high emitting assets with hightransition potential, based on the nature of the business activities
practiced and a limited set of transition indicators and metrics,
allowing investors to make judgements on transition investing based on
appetite and own view of transition
Reporting standard for all companies subject to the Corporate
Reporting Sustainability Directive (CSRD). Disclosure required in 2024
for the first wave of companies.
Recommendations for the reporting framework for transition
activities and investment opportunities, which can be considered byjurisdictions and by FIs on a voluntary basis
Recommendations to inform the UK’s regulatory requirements ontransition plan disclosures.

Standard setters / assessors / data providers

Frameworks reviewed – continued
Referencein thisdocument
ACT

ORGANISATIONFRAMEWORK REVIEWEDWorldBenchmarking
Alliance (WBA)CDP

Assessing low-Carbon Transition
Generic Methodology v 1.1, April 2021*
CDP Technical Note: Reporting on
Climate Transition Plans, February 2023

CDP

Climate Action
100+ (CA100)

Climate Action 100+ Net Zero Company
Benchmark v1.2, Disclosure Framework,
Assessment Methodology, October
2022
Climate Bonds Standard v4.0 (Part D:
Entity Certification), April 2023

CA100

Corporate net-Zero Standard Version
1.1, April 2023

SBTi

TPI's methodology report: Management
Quality and Carbon Performance
Version 4.0, November 2021*

TPI

Climate Bonds
Initiative (CBI)
Science Based
Targets Initiative(SBTi)
Transition
Pathway
Initiative (TPI)

CBI

A note on the primary purpose of the framework
The foundation of the Assessing Low-Carbon Transition (ACT)methodology for the scoring of corporates’ transition plans
Guidance on how organisations’ disclosing through CDP candemonstrate they have a credible transition plan in place. Supports
CDP disclosure requests.
Disclosure Framework Indicators to evaluate the adequacy ofcorporate disclosure on net zero and the alignment of company
actions with the Paris Agreement goals

The foundation of the Climate Bonds Standard for the certification of
corporates' credible transition plans and progress against those plans,
and any linked finance (e.g., SLBs)
The foundation of the Net-Zero Standard for the assessment andvalidation by SBTi of corporates’ net-zero targets
Foundation for the assessment by TPI of the progress companies
are making on the low-carbon transition, with a focus on emissions
performance and management quality* Due to be updated in H2 2023

Focus and scope of frameworks reviewed
THEME

COMPONENT

Environmental
Targets

SUB-COMPONENT

Financial institution led initiatives

Standard setters/ assessors/ data providers

GFANZ

ACT

ICMA

IIGCC

SMI*

CDP

CA100

CBI

SBTi

Regulation
TPI

ESRS
E1

G20

TPT

Emissions
Business & operational

Other
Foundation

Financial
Objectives, priorities & implications
Business planning and operations
Financial planning

Deliverystrategy

ImplementationEngagement with the value chain
Engagement beyond the value chain
Sensitivity analysis
Internal policies

Accountability
mechanisms

Internal
governance
Externaltransparency

Oversight & remuneration
Resetting transition plan
Disclosure
Independent verification* SMI notes that a transition plan is a minimum requirement, but does not describe the necessary elements of that transition plan

Reading the detailed mapping tables…

•

The following slides document the results of the mapping analysis – cross-referenced to the principles and sub-principles
outlined on slides 16-19•

The mapping infers no judgement•

Whether and how any particular aspect is addressed in a specific framework is influenced by the scope and objectives ofthe framework (see slides 23-24 for an overview of the primary purpose of each framework)•

For this reason, the frameworks have been grouped in the analysis according to the nature of the author/ the primary
purpose of the framework•

Notwithstanding, the mapping tables utilize a graded shading system where appropriate to illustrate the relative strengthof the analysed options, where not all options are deemed equal.

•

A note on GFANZ in the mapping: The GFANZ report "Expectations for Real-economy Transition Plans" is a summary of
public transition plan and climate guidance for real-economy companies reporting on climate-related issues at the time ofwriting. It does not set out disclosure requirements or guidance, but helps companies understand the information and data
expectations of net-zero committed financial institutions. Information identified in this report has been mapped as
requirements for the purposes of this exercise.

Climate Bonds Initiative 26

Targets: No consistent message that the target forcorporate transitions should be 1.5 degrees
1.1.1 The corporate's long-termemissions goal aligns with the goals of
the Paris Agreement

Financial institution led initiatives

Not addressed Corporate toin framework disclose their end
goal and therationale for that

Corporate end goal isalignment with collective
target of global warming
no more than 1.5
degrees C

SMI

ICMA

IIGCC

CA100

ACT, TPI

CBI, CDP, SBTi, TPI

G20

ESRS E1GFANZStandard setter / assessor / data provider
Regulation focused

Corporate end goal is Corporate end goal Corporate end goal isaligned with national is net zeroalignment withpledgesemissionscollective target ofglobal warming well
below 2 degrees C

TPI
TPT

The purpose of the framework influences this aspect.
E.g., disclosure frameworks focus on transparency overthe corporate’s goal, rather than advocating a particulargoalTargets: Mixed guidance on the importance of setting longterm targets and interim targets at this time
1.1.2 Emissions targets cover Not addressed
the short-, medium- andin framework
long-term

Corporates have
Corporates shortshort- and medium- medium- and longtargets only
term targets

Definition of short-term, medium-termand long-term
Frequency of interim targets over short-,
medium- and long-term

Financial institution led
initiatives
Standard setter / assessor /data provider
Regulation focused

GFANZ, ICMA, IIGCCSMI*

ACT (max), CA100,
ACT (min), SBTI, TPI
CBI , CDP, TPI (level(level 3)
4)
G20

ESRS E1, TPT* SMI does not explicitly address this, though noted that some corporates are
required to have SBTi approved targets – so in some cases aligns with SBTi

1.1.3 Interim emissions
Not addressedtargets are sufficiently
in framework
frequent to enable reportingand monitoring of progressover timeTargets include
regular interim
targets for short tomedium term only

Targets include
regular interim
performance targets
from today to the end
targetFinancial institution led
initiatives

IIGCC, SMI

ICMA

GFANZ

Standard setter / assessor /data provider

CA100, SBTi,TPIACT (min score)

ACT (max score), CBI,
CDP

G20

ESRS E1, TPT

Regulation focused

Targets: Mixed guidance on the inclusion of scope 3
emissions at this time and the role of offsets
1.1.4 Emissions targets are do not
exclude substantial portions ofemissions

Financial institution led initiatives

Not addressed Targets cover scope 1 Targets cover all
in framework and 2 emissions.
material scope 1, 2
Scope 3 inclusion is and 3 emissions
sector and/ ormateriality
dependent
GFANZ, ICMA, IIGCC

SMI*CA100, CDP (near
CBI, CDP (long term
term targets), SBTitargets), SBTI (long(near term targets),
term targets)
TPI (level 3)Standard setter / assessor / data provider

Regulation focused

G20

1.1.5 Emissions targets maximise own Not addressed Permitted with noactions and minimise the role of offsets in framework restrictions

Financial institution led initiatives
Standard setter / assessor / data provider
Regulation focused

SMI*

Targets cover all
scope 1, 2, 3
emissionsACT

ESRS E1, TPT

Permitted with norestrictions but
separately report
offsets and acompany's own
mitigation efforts

ICMA

Permitted for residual Permitted for residual
emissions only - no emissions only (not toseparate demarcation reach target- but full disclosure emissions) - andseparately
demarcated
IIGCC

GFANZ

ACT, CBI, CDP, SBTi

CA100, TPI
G20

TPT

ESRS E1

Definition ofmateriality* SMI does not explicitly address
this, though noted that some
corporates are required to have
SBTi approved targets – so insome cases aligns with SBTiTargets: Consistent recognition of emissions intensity andabsolute emissions metrics but variation in which is primary, if either
1.1.6 Emissions targets use
comparable, impactful metrics

Not
Targets must be expressed as:
addressed in Emissions
Emissions intensity
framework
intensity metrics OR absoluteemissions metrics

Financial institution led initiatives

SMI^

Standard setter / assessor / data
provider

CBI, TPI

Regulation focused

Absolute emissions Emissions
metrics
intensity AND
absolute
emissions metrics

ICMA

ACT, CA100*, SBTi

CDP
ESRS E1, TPT* GFANZ and CA100 recognize equally physical and economic intensity metrics. In all other cases
emissions intensity means physical emissions intensity only.
^ SMI explicitly references carbon intensity reduction targets, and it is also noted that some
corporates are required to have SBTi approved targets – so in some cases aligns with SBTi+

Targets may additionally be expressedas:Absolute emissions Physical emissions
metrics
intensity metrics

GFANZ*, IIGCC

ICMA
TPI
ESRS E1, TPT

Recognition that economic intensity is not
an impactful metric for emissions targets
Recognition of the need for physicalemissions intensity targets – to enablebenchmarking against sectoral pathways

Targets: Clear message that targets should be benchmarked,
but no consistency on what to benchmark against
1.1.7 Emissions targets Not
are benchmarked
addressed inagainst credible sectoral framework
pathways/ otherbenchmarks

Benchmarking isrequired. No
further details
specified

Benchmarking is
Benchmarking isrequired. Corporates required andcan choose what to what tobenchmark against benchmark
and must disclose
against is
and justify
specified*

1.1.8 The selected
pathway/ benchmark
may be global orregional

Not addressed Only global
in framework pathways/
benchmarks
to be used

Financial institution led
initiatives

GFANZ, ICMA,
IIGCC

SMI

Financial institution led
initiatives

SMI, IIGCC

Standard setter /assessor / data provider

ACT

CA100, CBI, CDP,
SBTi, TPI

Standard setter /assessor / data provider

CDP

Regulation focused

ESRS E1, G20, TPT*The standard setters/ assessors/ data providers tend to each
recommend or require benchmarking against their own sectoral
pathways. These often have a common basis but are not identical. SMI(for some corporates) and CDP reference SBTi approved targets andpathways. CA100 assessments use TPI pathways.
^ Under limited circumstances.
~ Regional pathways being explored

Regulation focused

ESRS E1

Only regional
pathways/benchmarks to
be usedGlobal or
regional
pathways/benchmarks
can be used

GFANZ, ICMA
SBTi~

ACT

ACT, CA100^,
CBI^, TPI^

G20

TPT

Commonly recognized regional pathways (or principles for thedevelopment of credible regional pathways)
Comparison of existing independent sectoral pathways as the basis foragreement on commonly accepted pathways (or range of emissions
thresholds) and emissions calculation methodologies

Targets: No consistency in respect of what alignment withthe selected benchmark pathway means
1.1.9 Emissions targets alignwith the selected pathway/
benchmark sufficiently rapidly
to avoid contributing toovershooting

Not
Not applicableaddressedinframework

Financial institution led initiatives
Standard setter / assessor / data
providerRegulation focused

Alignment
Disclose how
Align with sectoral Align with annual
required butalign withpathway by 2050 reduction rate
what that means sectoral pathway
over fullis not specified
timeframeICMA
CDPESRS E1,
G20*The Cross-sector pathway** The Sectoral Decarbonisation Approach

IIGCC

SMI
ACT, CA100(minimum),SBTi**TPI^

Align with
Align withsectoral pathway sectoral pathway
by 2030 at thein the short,latest (and stay medium and longalignedterm
thereafter)
CBI

SBTi*

CA100
(maximum)

TPT

Common methodology for credible alignmentthat taking into account cumulative emissions,
not just alignment date see e.g., IIGCC’s
cumulative benchmark divergence’ approachTargets: Potential business and operational metrics arecommonly identified, with most frameworks leaving selection to the corporate
1.2.1 Action plans aretrackable

Financial institution led
initiatives

Not
Trackable business Framework specifies
addressed in and operational which trackable
framework metrics are
metrics or indicators
identified
to be used(selection of
metrics is at
discretion of
corporate)

1.2.2 Finance plans Not
Trackable metrics or indicators Trackable metrics or indicators
are trackableaddressed relating to the cost of transition relating to the wider financial
in
implications
framework
Corporate
Specific metrics Corporate
Specific metrics
identifies
are noted in the identifies these are noted in thethese metrics framework
metrics
framework(selection of(selection of
metrics is at
metrics is at
discretion of
discretion of
corporate)
corporate)

IIGCC, SMI

Financial institution
led initiatives

IIGCC

GFANZ

ICMA, SMI

Standard setter /assessor / data
providerSBTi, TPI

CBI, CDP

ACT, CA100

CBI

Regulation focused

G20

TPT

ESRS E1ESRS E1, TPT

GFANZStandard setter /CDP, SBTi, TPI ACT, CA100, CBIassessor / data provider
Regulation focused

G20

ESRS E1, TPT

ICMA

SMI
ACT

Delivery strategy: Agreement that a clear ‘vision statement’is needed, but guidance varies regarding the content of it
2.1.1 The transition goal andstrategy is clear and coherent

Financial institution led initiatives

Standard setter / assessor / data
providerRegulation focused* Focus on green products

Not
Objectives of the The business lines How the business
The impact on
The role of theaddressed in transition are
and operating
will evolve from BAU existing businesscompany inframework describedmodel of theto that future vision lines and assets and supporting economy
transitioned(decarbonisationcompany's overall wide transition is
corporate arelevers and impact of business strategy is described
Number of thesedescribed
those on emissions) described
items addressed inis described
the framework
GFANZ
GFANZ
GFANZ
GFANZ
GFANZ
5/5
ICMA
1/5
IIGCC*
IIGCC
2/5
SMI
ACT
ACT
ACT
3/5
CA100
CA100
2/5
CBI
CBI
CBI
CBI
4/5
CDP
CDP
2/5
SBTi
TPI
ESRS E1ESRS E1ESRS E1
3/5
G20
TPT
TPT
TPT
TPT
TPT
5/5

Guidelines on how to measure the impact of thecompany’s transition on both its own businessstrategy and broader economy-wide decarbonisation

Delivery strategy: Agreement on the need for internalconsistency between the targets and action plan
2.2.1 Action plans are comprehensive
and consistent with the emissions
targets

Not addressed There is a roadmap of The impact of each The actions collectively The actions collectively
in framework actions
action on emissions/ address all emissions address the full timeline
contribution to(scopes and types)
to the target goal
emissions targets is covered by the
Number of these items
identified
emissions targets
addressed in theframework
GFANZ
GFANZ
GFANZ
GFANZ
4/4
ICMA
1/4
Financial institution led initiatives
IIGCC
IIGCC
IIGCC
3/4
SMI
ACT
ACT
3/4
ACT
CA100
CA100
3/4
CA100
CBI
CBI
4/4
CBI
CBI
Standard setter / assessor / data provider
2/4
CDP
CDP
SBTi
TPI
ESRS E1ESRS E1ESRS E1ESRS E1
4/4
Regulation focused
G20
TPT
TPT
TPT
TPT
4/4

Delivery strategy: Guidance gap in respect of credible external
evidence needed to support the assumptions underpinning the delivery strategy
2.2.2 Action plans are backed byrobust evidence

Not addressed inframework

Trade association
benchmarking
recognised as
credible evidence

GFANZ

Financial institution led initiatives

Peer benchmarking
Past emissions
recognised as credible reductions trends
evidence
recognised as credible
evidence

GFANZ

ICMA
SMI

Standard setter / assessor / data
providerRegulation focused

CA100
CDP
TPI
SBTI

CBI

Other external
evidence recognised
as credible evidence*

GFANZ
IIGCC

IIGCC

ACT

ACT
CBI

ESRS E1
G20
TPT* E.g., Academic studies, third party expert verification, evidence fromcomparable action taken in similar circumstances, contractual
undertakings, government or regulator undertakings, technology
readiness levels or established market trends

Number of these
items addressed in
the framework
3/4
2/4
2/4
2/4
1/4
-

Guidance on the nature of the evidence baseneeded to support the credibility of theassumptions underpinning the delivery strategy

Delivery strategy: Agreement that a finance plan is a key
component of a transition plan, but not alignment on key financial indicators
2.2.3 Finance plans cost out Not
Finance plans
the transition and address the addressed in provide
wider financial impacts for the framework information on
corporate
any assumed
internal carbon
price

Financial institution led
initiatives

GFANZ

SMI

Standard setter / assessor / data
provider
SBTi

Finance plansprovideinformation on
the capex
required fortransition

GFANZ
IIGCC
ICMA

ICMA
ACT

Regulation focused

Finance plansprovideinformation onrisks to financial
viability

ACT

ACT

CBI

CBI
CDP

TPI
ESRS E1
G20
TPT

TPT

* In respect of green products and nature-based solutions only** In respect of the balance sheet impact of green product revenue only

TPT

Finance plans
Finance plans
These
provideprovideassumptions are
information on information on reflected in thethe planned
the implications corporate’ssource of finance of the transition financial
for the transition for thereportingcorporate’sbalance sheet/
Number of these
P&L/ cash flows/
items addresseddebt
in the framework
GFANZ
GFANZ
4/6
IIGCC*IIGCC**
3/6
2/6
ACT
5/6
ACT
CA100
1/6
CBI
CBI
5/6
CBI
2/6
CDP
TPI
2/6
ESRS E1
3/6
1/6
TPT
TPT
TPT
6/6

Key financial
indicators

Delivery strategy: Agreement that wide external
engagement is a key component of a credible delivery strategy
2.2.4 External
Not addressed inengagement beyond
framework
the value chain is partof the delivery strategy

Financial institution led
initiatives

ICMA
SMI
SBTi

Standard setter /assessor / data provider

Regulation focused

ESRS E1
G20

Transparency
Transparency on Transparency over Transparency over The transition plan Corporate has andovercurrent andalignment withcurrent andis not in conflict will actively
membership in planned
policyplannedwith external
engage with the
trade
engagement withengagement with positioning
public sector toorganisations
peers and industry
the public sector
drive climate
and current and climate initiatives
to drive climate
policiesplannedpolicies
engagement
Number of these
items addressed inwith thosethe framework
organisations
GFANZ
GFANZ
GFANZ
GFANZ
GFANZ
5/6
IIGCC
1/6
ACT
ACT
ACT
ACT
ACT
ACT
6/6
CA100
CA100
CA100
CA100
CA100
5/6
CBI
1/6
CDP
CDP
CDP
CDP
CDP
5/6
TPI
TPI
TPI
3/6
TPT
TPT
TPT
TPT
4/6

Delivery strategy: High degree of emphasis on identifying
external sensitivities, less on monitoring those sensitivities, or outlining therole of internal policies
Not
Key
Impact on
Transparency Key
addressed in sensitivities delivery ofon how the key sensitivities
framework underlying the transition plan sensitivities areidentified Number ofthese items
transition plan if assumptions reflected in the areare identified or sensitivities financial
monitored addressed inare not realised statements
theis identified
framework
GFANZ
GFANZ
GFANZ
3/4
Financial institution led
ICMAinitiatives
IIGCC
SMI
ACT
ACT
2/4
CA100
Standard setter /
CBI
CBI
CBI
3/4
assessor / data provider
CDP
SBTi
TPI
ESRS E1ESRS E1
2/4
Regulation focused
G20
TPT
TPT
TPT
TPT
4/4
2.2.5 The key
assumptions andexternal factors on
which the transition
plan depends are
identified

2.2.6 Internal policies
enabling delivery of thetransition plan are
identified

Financial institution led
initiatives
Standard setter / assessor /data provider
Regulation focused

Not addressed The key internal
in framework policies to deliver theplanned transition are
identified

SMI, IIGCC,
ICMA, IIGCC,
SMI
CA100, CDP,
SBTi, TPI
G20

GFANZ
ACT, CBIESRS E1, TPT

Climate Bonds Initiative 39

Accountability mechanism: Agreement on the importanceof Board and senior management expertise & responsibility
3.1.1 The Board haveNotoversight andaddressed
ownership of theintransition plan and the framework
senior management
for managing
implementation

Financial institution led
initiatives

Appropriate expertise on
climateExecutive management
responsibility

WithinAt Board level
executive
management

Corporate is
Executive
transparent on management
oversight of the assigned
management responsibility
structure for andhandling
accountable totransition plan Board
execution
GFANZ
ICMA

GFANZ

GFANZ

ACT

ACT
CA100

SMI

Standard setter /assessor / data provider

CDP
SBTi

Regulation focused

ACT
CBI
CDP

CDP

TPI
TPT

Board member Corporate isTransition
or committee transparent on plan signedwith explicit
how the Board off by the
responsibility oversees theBoardfor oversight of transition plan
climate change and whether it
policyis subject toboard approval
GFANZ
GFANZ
GFANZ
ICMA
IIGCC
ACT
CA100

ACT
CA100

CDP

CDP

CBI

TPI
ESRS E1

G20

Board responsibility

TPT

TPT

ESRS E1
TPT

TPT

Deliveryprogressoverseen by
the Board, Number ofincluding any these items
corrective addressed intheactionsframework
GFANZ
7/8
2/8
1/8
ACT
6/8
3/8
CBI
3/8
CDP
6/8
2/8
2/8
TPT
6/8

Accountability mechanism: Agreement that disclosure oflinked remuneration is needed, but some guidance goes further
3.1.2 Remuneration is linked to theobjectives of the transition plan

Not addressed Corporate provides Senior executive
in framework transparency on any remuneration islinked remuneration linked to targets
GFANZ
ICMA

Financial institution led initiatives

CBI
SBTi

Regulation focused

ESRS E1
G20

TPT

GFANZ
IIGCC

SMI

Standard setter / assessor / data provider

Board remuneration
is linked to targets

ACT
CA100

ACT

CDP
TPI

CDP

Accountability mechanism: Agreement that regularmonitoring of implementation and regular review & reset of the transition
plan is needed
3.1.3. Tools and procedures in place Not addressed infor tracking progress and taking
framework
corrective action where needed

Change management
process is in place fortracking andmonitoring
implementation
progress

3.1.4. The targets and delivery
strategy are regularly
reappraised

Not addressed Regular review and Plus, adhoc review andin framework reset of transition reset triggered bytargets and plans events thatcompromise validity ofexisting targets andplans

Financial institution led initiatives

ICMA, IIGCC, SMI

GFANZ

Financial institution led initiatives

ICMA, IIGCC,
SMI

GFANZ

Standard setter / assessor / data
providerCA100, SBTi, TPI

ACT, CBI, CDP

Standard setter / assessor / data
providerCA100, TPI

ACT, CBI,
CDP, SBTi

CBI,
SBTi

Regulation focused

ESRS E1, G20

TPTRegulation focused

ESRS E1, G20

TPT

TPT

* Some frameworks note at least every 3 years and some, every 5 years,
others do not define the recommended regularity

Accountability mechanism: Consistent emphasis ontransition plan disclosure
3.2.1. Sufficient disclosurearound transition plansNotaddressed inframework

Emissions targets

Non-emissions metrics and targets

Emissions targets Tools andActual performance
disclosed
methodologies for against the emissions
calculation oftargets is disclosed
emissionsannually
disclosed
GFANZ
ICMA

Financial institution led
initiatives

GFANZ
ICMA

SMI

Standard setter / assessor /data provider

Regulation focused

ACT
CA100
CBI
CDP
SBTi
TPI
ESRS E1
G20
TPT

GFANZ

Interim nonemissions metrics
and milestones
identified in thetransition plan aredisclosed
GFANZ

Actual performanceagainst the interim
metrics andindicators is disclosed
annually

Checklist of elements
to disclose is given

GFANZ

GFANZ
ICMA
IIGCC

IIGCC

CBI
CDP

ACT
CA100
CBI
CDP

G20
TPT

G20
TPT

ACT
CA100
CBI
CDP

G20
TPT

CBI
CDP
SBTi
TPI
ESRS E1
TPT

CA100
CBI
CDP

Other elements oftransition plan

ESRS E1
TPT

Accountability mechanism: Independent assessment isimportant – though not all guidance extends this to the full transition plan
3.3.1. The transition plan isindependently assessed

Not
Corporate
addressed in provides
framework transparency onwhether thetransition plan
has been
independently
assessed

Independent assessment/ validation Independent assessment/ validation Independent assessment/ validationof actual emissions (past/ current/ of emissions targetsof rest of transition plan
future when realised)
Recommended

RequiredRecommended

GFANZ

Financial institution led initiatives

Standard setter / assessor / data
providerRegulation focused

CA100

ICMA

TPT

Required

ICMA

ACT

ACT

ACT

CBI
CDP
SBTi
TPI

CBI
CDP
SBTi
TPI

CBI
CDP

ESRS E1
G20

Recommended

GFANZ
IIGCC

SMI

Required

TPIAccountability mechanism: Standard ofassessment
addressed (implicitly or explicitly) predominantly
by the standards setters3.3.2. A high standard ofassessment is followed

Financial institution led
initiatives
Standard setter / assessor /data provider
Regulation focused

Not addressed inDegree of assurance recommended/ required
framework
Corporate
Opinion/ second Limited assurance Reasonable
providesparty opinion
assurancetransparency on (SPO)
the degree of
assurancesought andgiven
GFANZ, IIGCC,
SMI

ICMA

CDP

ACT, SBTiESRS E1, G20

TPT

Assessor
Assessment by
guidance
providerthemselves

Assessment by Assessment by
any SPOapproved
providerindependent expert
workingtrained by Standard
independently setter

ICMA
CBI

CBI

CA100, SBTi, TPI

ACT, CBIBoundaries: Guidance lacking on how to integrate othergoals beyond mitigation into the decarbonisation transition plan
4.1.1 The GHG transition Not addressed The plan
The transition planThe corporate has
will be a Just Transition in framework identifies how to incorporates Just a broader
manage theTransition
sustainability
impact of thecommitments
strategy
decarbonisation
addressing Justtransition on Just
Transition
Transition
considerations
GFANZ, ICMA,
Financial institution led
IIGCC
ICMA
SMI
initiatives
IIGCC

4.1.2
Not addressed The plan
The corporate has a
The transition is compatibl in framework addresses thebroader
e with other social andimpact on some* sustainability strategyto
environmental goals
other social
mitigate environmental aand environmental nd social externalities
aspects
and contributions to the
SDGs
Financial institution led
SMI
GFANZ, IIGCC
ICMA
initiatives

Standard setter / assessor ACT, CDP, SBTi,/ data provider
TPI

CBI

Standard setter / assessor /data provider

ACT, CA100,
CDP, SBTI,CBIRegulation focused

TPT

Regulation focused

ESRS E1^, G20

TPTESRS E1, G20

CA100

Some frameworks do not address a Just Transition inorder to focus first on decarbonization, as part of astaged approach. Others do not address a Just
Transition (or only have a very light touch approach)due to a lack of expertise in respect of a Just
Transition.

* GFANZ references nature positive impacts, TPT the natural environment, IIGCC
nature-based solutions and CBI a broader spectrum of social and environmental
aspects^ However, ESRS E4 addresses the transition plan and consideration of
biodiversity and ecosystems in strategy and business modelBoundaries: Preference for the transition plan to cover the wholelegal entity, but few frameworks address how to aggregate assessment back up to thecorporate level when targets and strategies set at disaggregated activity level
5.1.1 Emissions targets cover the entire Not addressed in Targets may cover only part ofentityframework
legal entity e.g., an economic
activity, and company discloses
which part is covered

Financial institution led initiatives

ICMA, SMI

Standard setter / assessor / data
providerRegulation focused

GFANZ,
Financial institution led initiatives
ICMA, SMI
ACT, CA100,
Standard setter / assessor / data provider
CDP, SBTi, TPI

Regulation focused

GFANZ

GFANZ, ICMA, IIGCC

ACT, CA100, CBI

ACT, CA100, CBI, CDP, SBTi, TPI

TPT

G20, TPTESRS E1

5.1.2 There is a performance threshold Not addressed(and methodology) to aggregate
in frameworkassessment up to the corporate level
when targets and strategies established
on a disaggregated basis (e.g., for eachbusiness activity separately)

ESRS E1, TPT

Targets may cover entire legal
entity (i.e., coverage of allactivities on an aggregated or
disaggregated basis)Targets must coverwhole parent group

CBI

Includes methodology Framework includes
Framework includes Framework includes
to aggregate emissions threshold formethodology tothreshold for
reductions targets and acceptable emissions aggregate quality of acceptable quality of
performance acrossreductions targets and transition plan across transition plan acrossdifferent activities of the performance across the different activities of the entity as a whole
entityentity as a whole
the entity
IIGCC*
CBI^
G20

CBI^

CBI^

CBI^

* The ‘Benchmark Divergence
Metric’ (BDM)^ A 90% ‘pass threshold’ wherebusiness activities have been
weighted according to either
revenue or emissions