A group of major UK companies, representing more than £4.5 trillion GBP in assets announced today a call on the UK government to set a requirement for large companies to disclose net zero transition plans. Signatories included FTSE 100 companies from a broad range of industries, including BT, Tesco, Aviva, and Legal & General Investment Management, as well as sustainability focused organizations such as E3G and WWF.
In a letter to Chancellor of the Exchequer Rishi Sunak and Business and Energy Secretary Kwasi Kwarteng, the businesses argue that in addition to setting ambitious climate goals, companies must also provide transparency into their strategies to achieve their targets. The companies are calling for a policy requiring disclosures to be rolled out by 2025.
Mark Versey, CEO, Aviva Investors, said:
“As a business aiming to achieve net-zero carbon emissions by 2040, Aviva supports mandatory transition plans. These are vital if companies’ net zero commitments are to translate into the reduction in global emissions required to meet the Paris Agreement. Ahead of COP26, the UK should demonstrate its international leadership on climate change by stating its intention to make transition plans a mandatory requirement.”
The UK is already one of the leading jurisdictions for mandating climate-related disclosures. In November, the country announced that it would become the first in the world to mandate economy wide disclosures in line with the TCFD, and legislation has also been introduced to require TCFD-aligned climate reporting for pension schemes.
The letter follows the inclusion of transition plans in the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), and as investors are beginning to demand more information regarding portfolio companies’ climate strategies.
Tanya Steele, WWF’s chief executive said:
“These leading businesses are playing their part in achieving the UK’s climate goals. But recent WWF research shows that only 19% of top UK companies have published a detailed action plan to reduce their climate emissions to Net Zero. With some of the largest UK companies calling for mandatory regulation to create a level playing field, it is time for the Government to announce legislation to ensure all large businesses publish transition plans for how they will cut their climate emissions.”