The Transition Plan Taskforce (TPT) of the United Kingdom announced the launch of its new disclosure framework for companies' climate transition plans.
According to TPT Co-Chair and Aviva Group CEO Amanda Blanc, the new disclosure framework is being implemented because companies are increasingly announcing net zero commitments. Still, many have yet to publish plans to support their targets, with disclosed techniques varying in terms of quality, consistency, and level of detail.
"In recent years, we've witnessed a surge of private enterprises declaring their intentions to contribute to net zero. Now is the time for financial institutions and businesses to present outstanding strategies demonstrating how they will achieve their goals."
Rishi Sunak, the then-Chancellor of the Exchequer and current Prime Minister of the United Kingdom, announced the foundation of the TPT during COP26 in April 2022. At COP26, Sunak announced that the UK will introduce mandatory disclosure requirements for net zero transition plans from UK financial institutions and listed companies, and HM Treasury unveiled plans to establish a task force comprised of industry and academic leaders, regulators, and civil society representatives in order to combat greenwashing.
The release includes the TPT Disclosure Framework, which provides recommendations for companies and financial institutions to develop gold-standard transition plans, and the TPT Implementation Guidance, which outlines the steps necessary to develop a transition plan, as well as when, where, and how to disclose it. In addition, the TPT launched a "Sandbox" to assist users in testing framework and advice implementation.
The new Disclosure Framework, which will inform future regulation in the UK, and the Implementation Guidance that accompanies it are based on existing and emerging standards and recommendations, such as the TCFD recommendations, the Glasgow Financial Alliance for Net Zero (GFANZ), and the International Sustainability Standards Board (ISSB).
David Schwimmer, a TPT Steering Group member and the CEO of LSEG, stated:
"Without access to high-quality, reliable, and comparable data, financial markets cannot play a vital role in decarbonizing our economy. As other nations consider mandated transition plans, this research could guide comparable global regulatory approaches."
The TPT announced that the framework and guidance are available for public comment through the end of February and that it will use the feedback from the public comment period and the Sandbox to complete the tools.
Sacha Sadan, ESG Director of the UK's Financial Conduct Authority (FCA), stated that the regulator intends to use the TPT's final outputs to tighten its transition plan disclosure requirements for listed companies and regulated businesses.
"We enthusiastically welcome the publication of the Disclosure Framework and Implementation Guidance by the Transition Plan Taskforce today. The FCA participated extensively in creating and drafting these early outputs."