HM Treasury, the UK’s economic and finance ministry has launched the UK Transition Plan Taskforce (TPT), a new initiative aimed at establishing a framework and standards for companies to disclose their climate transition plans.
The launch of the taskforce follows the publication last year by the UK’s Chancellor of the Exchequer Rishi Sunak of “Greening Finance”, a roadmap outlining the country’s strategy for implementation of new Sustainability Disclosure Requirements (SDR) for businesses and asset managers. The SDR forms a major part of the UK’s Green Finance Strategy, which aims to establish the UK as a center for international green finance, and to align the financial sector and capital flows with the delivery of global and domestic climate and environmental objectives.
The roadmap also introduced requirements, initially on a comply-or-explain basis, for some companies to disclose their net zero transition plans. At the COP26 conference in November, Sunak announced that the UK will introduce requirements for mandatory disclosure of net zero transition plans from UK financial institutions and listed companies, and HM Treasury unveiled the plans to establish the Transition Plan Taskforce, composed of industry and academic leaders, regulators, and civil society groups, to develop a “gold standard” for transition plans, in order to guard against greenwashing.
As regulators and governments increasingly introduce requirements for financial climate-related reporting, transition plan disclosure is emerging as the next frontier for sustainability reporting. Last October, the TCFD released its first set of guidance for companies to disclose their plans and progress relating to their climate transition strategies.
The TPT said that it will draw from the existing body of work in its own development, including the TCFD recommendations, and will also work with international frameworks preparing guidance on transition plan disclosures including the Glasgow Financial Alliance for Net Zero (GFANZ) and the International Sustainability Standards Board (ISSB).
Set up with a two-year mandate, the TPT aims to deliver its initial recommendations by the end of 2022 for a Transition Plan Disclosure Framework enabling “science-based, standardised and meaningful transition plans,” regulatory templates and guidance for finance and key economic sectors, the role of assurance and third-party verification for reporting, and for the preparation of accurate and accountable plans and the avoidance of greenwashing.
The new taskforce is co-chaired by Economic Secretary to the Treasury John Glen and Aviva Group CEO Amanda Blanc.
In a social media post announcing the launch of the TPT, Glen said:
“I’m delighted that the Taskforce is now up & running, supporting our ambition to become the world’s first net zero-aligned financial centre. It brings together an impressive range of stakeholders to ensure firms can put together plans to aid our transition to a low-carbon economy.”