Best Practices: Developing A Corporate Climate Transition Plan
01 Mar, 2024
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Executive Summary
Developing a climate transition plan is an important step for organizations to act on their climate commitments. Organizations such as CDP, the Glasgow Financial Alliance for Net Zero (GFANZ) and the UK Transition Plan Taskforce (TPT) have published general and sector-specific guidance for transition planning. However, most firms have yet to start the process. Developing a plan is not an easy task; many businesses have questions about how to do so and what a good plan looks like. Verdantix conducted interviews with corporate sustainability leaders and vendors supporting transition planning, reviewed published transition plans and synthesized existing guidance to identify best practices. We found that transition planning is an iterative process that involves people and information from all parts of an organization. Transition plans build on and support strategic planning and should holistically address and disclose net zero targets, climate risks and systemic transformation. Getting started now is critical; our recommendations can guide organizations as they work through the process.
Transition planning emerges as a critical element of climate strategy
Transition plans provide value across a business by enabling climate action
Deciding what goes into a credible transition plan is an organizational hurdle
Firms lack the necessary guidance and expertise for transition planning
Consensus on what makes a good transition plan is still developing
Transition plan guidance centres on GHG management
Secondary elements are critical for a successful global transition
The first generation of transition plans sets a high bar, despite challenges
Best practices for transition planning are about lessons and dialogue
Stakeholders from across the organization must be involved
Firms must source data and facts to overcome internal challenges
Careful oversight of transparency mitigates risks
Five recommendations for corporate transition plans
Transition plans provide value across a business by enabling climate action
Deciding what goes into a credible transition plan is an organizational hurdle
Firms lack the necessary guidance and expertise for transition planning
Consensus on what makes a good transition plan is still developing
Transition plan guidance centres on GHG management
Secondary elements are critical for a successful global transition
The first generation of transition plans sets a high bar, despite challenges
Best practices for transition planning are about lessons and dialogue
Stakeholders from across the organization must be involved
Firms must source data and facts to overcome internal challenges
Careful oversight of transparency mitigates risks
Five recommendations for corporate transition plans
Figure 1. Timeline of transition plan guidance
Figure 2. Elements that define three tiers of transition plan depth
Figure 3. Reviewed transition plans from numerous industries
Figure 4. A high-quality transition plan acknowledges dependencies on many internal and external factors
Figure 5. The transition planning process
Figure 2. Elements that define three tiers of transition plan depth
Figure 3. Reviewed transition plans from numerous industries
Figure 4. A high-quality transition plan acknowledges dependencies on many internal and external factors
Figure 5. The transition planning process
Assessing low Carbon Transition (ACT) Initiative, Grantham Institute (Imperial College London), Task Force on Climate-related Financial Disclosures (TCFD), ENGIE Impact, Natwest, CDP, Mercedez-Benz, Workiva, World Wildlife Fund (WWF), Bank of England, Schoeller Allibert, International Sustainability Standards Board (ISSB), Aviva, World Business Council for Sustainable Development (WBCSD), Bucknell University, International Labour Organization (ILO), Tyman, Risilience, UK Transition Plan Taskforce (TPT), ERM, Centrica, EDP, Glasgow Financial Alliance for Net Zero (GFANZ), Shell, Bioregional, Science Based Targets initiative (SBTi), Ball Corporation, Deutsche Bank, Organisation for Economic Cooperation and Development (OECD), Legal & General, Aptar, De Brauw Blackstone Westbroek, UN, AT&T, SSE, Rolls-Royce
About the Authors
Emma Cutler
Principal Analyst
Emma is a Principal Analyst at Verdantix, with a current research agenda focusing on solutions for climate risk management. She has a background in simulation and statistical …
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Ryan Skinner
Research Director
Ryan is a Research Director at Verdantix, where he leads a team of analysts delivering research, data and advisory services that help clients navigate the fast-evolving landsc…
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