A Treasury task force explained on the 9 October how listed companies and financial firms will have to outline plans to cut carbon emissions in the transition to a 2050 net-zero economy.
The plans dovetail with pre-existing mandatory climate standards, which are set to be replaced by new measures from the International Sustainability Standards Board (ISSB).
The blueprint by the Transition Plan Taskforce (TPT) builds on the ISSB’s plans and draws on work by the Glasgow Financial Alliance for Net Zero.
Listed companies and financial institutions will be expected to use the framework to disclose their transition plans for 2025 and onwards, which means the first reporting deadline will be in 2026.
Joanna Penn, a junior Treasury minister in Parliament’s upper house, said making transition plans mandatory is an essential part of Britain’s plans to become the world’s first net zero financial centre:
“The transparency and accountability offered by transition plans are vital to the fundamental shift in business and finance required for the economy-wide transition to net zero and a climate-resilient future.”
Michael Izza, chief executive of the Institute of Chartered Accountants in England and Wales (ICAEW), also praised the framework, saying:
“For the first time there is a definitive guide and insight into the risks and opportunities that surround the development and implementation of a climate transition plan.”
Amanda Blanc, group CEO of insurer Aviva and co-chair of the taskforce, said in a statement: “Backing up net zero ambitions with high quality and clear transition plans is crucial if we are to collectively deliver net zero.”
The net zero strategy builds on the Government’s ’ten-point plan for a green industrial revolution’ published 18 November 2020. It set out policies and proposals for decarbonising all sectors of the UK economy to meet the Government’s net zero target by 2050.
The Government stated net zero means “any emissions would be balanced by schemes to offset an equivalent amount of greenhouse gases from the atmosphere, such as planting trees or using technology like carbon capture and storage.”
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