Legal development

Transition Plan Taskforce issues Disclosure Framework and consults on sector guidance

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    What you need to know

    • The UK's Transition Plan Taskforce (TPT) has issued its Disclosure Framework and Implementation Guidance together with a suite of documents including a comparison with other reporting standards.
    • Sector-focused guidance for 40 sectors has also been published for consultation and will be followed by deep dives on certain sectors later in 2023.
    • It is anticipated that the UK government will consult in Q4 2023 on making the production and disclosure of transition plans (TPs) mandatory for large public and private companies.
    • The FCA welcomes the launch of the Disclosure Framework and intends to consult in 2024 on TP disclosures by listed companies, asset managers and FCA regulated asset owners in line with the Framework, alongside its consultation on implementing UK-endorsed International Sustainability Standards Board (ISSB) sustainability disclosure standards.


    The UK's Transition Plan Taskforce (TPT) has issued its Disclosure Framework and Implementation Guidance together with a suite of documents including sector guidance. The final versions of the Framework and Implementation Guidance follow the consultation drafts that were published in October 2022.

    The accompanying guidance includes:

    • Three documents that map the TPT Framework against the ISSB sustainability disclosure standards (SDS) and the first European Sustainability Reporting Standards (ESRS), which support the disclosures required under the EU’s Corporate Sustainability Reporting Directive (2022/2464). For more information, see ISSB publishes first standards on sustainability and climate disclosures and First European Sustainability Reporting Standards (ESRS) adopted.
    • A Sector Summary that outlines decarbonisation levers and metrics & targets for 40 sectors including consumer goods, extractive and minerals processing, financial services and renewable resources and alternative energy. The Summary will help TP preparers across the economy navigate the TP process. The consultation on the Summary is open until 24 November 2023, after which the TPT intends to consult on some deep dives for certain sectors with a view to finalising them in February 2024. These deep dives will include guidance for the metals and mining, oil & gas, electric utilities and power generation sectors.
    • An explanation of the legal considerations for companies drawing up TPs, including on directors' duties.

    For an overview of the TPT's November 2022 consultation draft, see our article, The basics of transition planning.

    What has changed

    The TPT has said that the final version of the Framework will be recognisable to those familiar with the draft.

    The Disclosure Framework builds both on the TCFD Recommendations and also the Glasgow Financial Alliance for Net Zero (GFANZ) guidance on TPs for financial institutions. It sets out the three guiding principles (Ambition, Action and Accountability) and five elements (Foundations, Implementation Strategy, Engagement Strategy, Metrics & Targets and Governance) that make a good TP (see the diagram below).


    Source: TPT Disclosure Framework 2023

    The TPT considers a credible TP should contain the following elements:

    • Foundations. The organisation's strategic ambition to mitigate, manage and respond to the changing climate and leverage opportunities in the transition to a low GHG and climate-resilient economy. The TPT considers this will include a net zero commitment and GHG reduction targets.
    • Implementation Strategy. The short, medium and long-term actions the organisation will take to achieve its strategic ambition. The implications of these actions for its financial position, financial performance, and cash flows should also be included.
    • Engagement Strategy. The TP should explain how the company is engaging with its value chain, industry peers, the government, public sector, communities, and civil society to achieve its strategic ambition.
    • Metrics & Targets. The TP should disclosure the financial and GHG metrics & targets that the organisation will use to measure progress in achieving its strategic ambition.
    • Governance. The TP should explain how it will be embedded in the entity's governance structures and organisational arrangements to achieve the strategic ambition.

    The Implementation Guidance has expanded from the consultation draft and now comprises six documents including guidance on sectors, the transition planning cycle and a comparison of how the Framework relates to key frameworks and standards like the ISSB and ESRS.

    Will the Framework become mandatory?

    The UK government plans to make the production and disclosure of TP's mandatory for large public and private companies based on the TPT's Disclosure Framework. A consultation on the nature and extent of the requirements is expected in Q4 of 2023.

    In August 2023 the FCA said it would consult on TP disclosures by listed companies in line with the Framework, alongside its consultation on implementing UK-endorsed ISSB Standards. It is anticipated this consultation will take place in 2024 with a view to these changes taking effect for financial years beginning on or after 1 January 2025 (see Ashurst Governance & Compliance Update Issue 41).

    The TPT has worked with several organisations around the world to develop its Framework so it is likely that it will also be used in, and adopted by, other jurisdictions.

    What is the impact on financial services firms?

    The FCA stressed that it had worked as part of the TPT to ensure that the TPT’s recommendations fit with other relevant international initiatives and within the sustainability-related disclosure standards globally. It is expected (although not confirmed) that the FCA's consultation on mandating TP Disclosures, described above, will also include asset managers and FCA-authorised asset owners, mirroring the approach taken with respect to TCFD disclosures.

    For most financial services firms, it is unlikely that transition plans will become mandatory. Voluntary disclosure is always available. But such decisions should be taken in light of the new anti-greenwashing rule that will come into force on the FCA's publication of its policy statement on Sustainability Disclosure Requirements which is expected in Q4 2023.


    At the launch event on 9 October 2023, Amanda Blanc, CEO, Aviva and Co-Chair of the TPT spoke about how to embed transition planning into corporate reporting and culture. She urged all companies to use the Disclosure Framework alongside other companies and in their supply chains. Banks and other investors should use the Framework with investee companies and borrowers.

    The TPT Framework states: "disclosure must not be viewed by businesses as merely a compliance exercise. Transition plans form a critical component of a firm’s business strategy – helping to explain to their customers, shareholders and investors how they will adapt and grow as the global economy transitions to net zero."

    The TPT Framework and supporting documents considerably advance the sustainability disclosure ecosystem. Their use will result in a giant leap towards understanding the climate-related risks and opportunities that the corporate world is subject to.



    By Anna-Marie Slot; Rob Hanley; Lorraine Johnston; Will Chalk; and Becky Clissmann.

    The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
    Readers should take legal advice before applying it to specific issues or transactions.


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