TPT reveals ‘gold standard’ disclosure framework

The UK’s Transition Plan Taskforce (TPT) has published its final framework to support businesses in adopting credible sustainable practices.

Formed in response to COP26, the Treasury kickstarted the TPT in April 2022. Their mission was clear: to ensure that large businesses, especially those in high-emission sectors, adhere to stringent net-zero disclosure requirements by 2025. These requirements aren’t merely superficial; they mandate that businesses produce comprehensive net-zero transition plans. These plans should not only outline long-term corporate emissions goals but also define the interim milestones and the transformation strategies for business models and investments. Moreover, a robust transition plan should demonstrate how it plans to support and train its workforce in the new environment.

Just six months post its inception, TPT unveiled its first proposal for a ‘gold standard’ for these vital transition plans. This proposal encompasses a framework which outlines how businesses should sculpt their plans, and the crucial components they must feature. Alongside the framework, the TPT also offers an implementation guidance document.

In the recent week, they’ve expanded on this initiative by releasing a 45-page report, targeting corporate climate disclosures. The report intends to align these disclosures with globally recognised standards and frameworks, ensuring a level of consistency and quality across the board.

TPT’s recommendations and timelines

The TPT proposes businesses publicise a transition plan this year and subsequently, present an update in 2026. For the interim years of 2024 and 2025, any information that is pertinent to the plan should be integrated into their financial reporting.

Furthermore, the TPT emphasises a holistic view, urging consideration of not just direct impacts but also the repercussions across the value chain. The ultimate goal? An “economy-wide” shift to net-zero by 2050.

The TPT’s recommendations aren’t formulated in isolation. They are a natural extension of the foundational disclosure norms established by the International Sustainability Standards Board (ISSB) and are influenced by the Glasgow Financial Alliance for Net Zero (GFANZ) – both of whom are esteemed members of the Taskforce.

A five-step process to robust corporate disclosure

The TPT outlines a five-step progression to enhance corporate disclosure:

1. Implementation phase strategy: Companies must unveil actions within their operations, products, and services.
2. Strategic ambition: This segment should expound on the financial implications based on climate data.
3. Engagement strategy: A blueprint detailing a corporation’s engagement initiatives with its value chain and sector members, which encompasses government entities, public sectors, communities, and civil society.
4. Metrics & targets: Companies must be transparent about the metrics they choose within their ‘Strategic Ambition’ to measure and monitor their progress.
5. Governance alignment: Every transition plan should be congruent with the company’s own governance structures and organisational arrangement.

Sector-specific guidance on the horizon

Next month, the TPT is poised to release a sector-specific guidance document for consultation, covering pivotal sectors including asset managers, asset owners, banks, food and beverage, electric utilities and power generators, metals and mining, and oil and gas. Come February, the TPT plans to unveil its finalised sector-focused guidelines and elucidate its “forward pathway” on transition.

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