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Climate Transition Plans, otherwise known as Climate Transition Action Plans or Net Zero Roadmaps are increasingly expected of companies. These plans are a core requirement of the recently published climate disclosure requirements; the EU Corporate Sustainability Reporting Standard (CSRD) climate disclosure standard European Sustainability Reporting Standards (ESRS) E1, the International Financial Reporting Standards (IFRS) S2 standard (the outcome of work by the International Sustainability Standards Board (ISSB)), CDP’s scoring methodology and the UK Transition Plan Taskforce (TPT). The Glasgow Financial Alliance for Net Zero (GFANZ) and Task Force on Climate-related Financial Disclosures (TCFD) have also published expectations and frameworks around climate transition plans.
The following steps help to prepare for climate transition plan reporting whether you are looking at the 2024 CDP Climate Disclosure, ESRS reporting, or to meet a request from investors.
How can you prepare to write your first Climate Transition Plan?
1. Get the basics in place
The foundation of any climate action strategy is a high-quality greenhouse gas inventory. With this in place, a climate risk assessment, ideally aligned with TCFD requirements, is the next thing to get in place. Net Zero targets, aligned with science-based targets (SBT) frameworks, will define the “finish line” of your transition to Net Zero and frame your climate transition planning process, so it’s hard to plan effectively without them. If you have already created a high-level strategy to reach Net Zero informed by these pillars of GHG inventory, climate risk assessment and Net Zero target, you are likely ready to prepare your first climate transition plan.
2. Choose your frameworks
Consider which regulatory (e.g., ESRS, UK TPT) or voluntary (e.g., CDP, IFRS S2) frameworks you will need to report to, and the timeframes for implementation. The frameworks are fairly aligned in terms of content but range from high-level (IFRS S2) to very detailed (UK TPT).
3. Get the right people on your team
Successful climate transition planning needs to be adapted to your business – cookie-cutter solutions won’t be successful. You will need to involve teams from across the business and include their perspective early for the best results. Strategy and finance input is a must, and most companies will require input from procurement, operations, facilities, and risk too.
4. Gather relevant information and check it against your framework
Most frameworks will require reporting on governance, GHG metrics and targets, climate risk assessment, decarbonisation actions planned / implemented, costs and finance of the plan, change impact assessment, and timelines. Work with your team to gather evidence of what you already have in place and compare it to your chosen framework(s).
5. Make a plan to report
Depending on the results of your content check and the steps your team agree to take after reviewing it, you may be ready for the preparation of a simple climate action transition plan report. Your first report will probably not be very detailed or comprehensive, but it will help you demonstrate that you have a credible plan to respond to Net Zero, which you can add detail to over time. If your check has identified gaps, make a plan to address them.
6. Think long term
Net Zero targets are longer than most business planning cycles but will require sustained action to meet them. Your climate transition plan isn’t going to be finished within a few months – it should be a living document which is regularly updated as your strategy is refined over time.
Anthesis’ Climate Transition Planning Readiness Check
Climate transition plans are asked to follow several different voluntary or mandatory frameworks, each with a detailed set of content requirements to meet. However, many companies are not yet fully ready to report comprehensively against these frameworks and are unsure how to approach the topic. Anthesis’ readiness check allows you to understand which aspects you are already prepared to report on, and what the next steps are to progress in publishing a comprehensive report. If you’re ready to prepare for climate transition planning, get in touch below.