UK Disclosure Framework for Net Zero Transition Plans
What is it?
The UK Disclosure Framework for Net Zero Transition Plans is a set of guidelines that companies can use to report on their efforts to transition to net zero emissions and support the transition to a low-carbon economy. The framework was developed by the Transition Plan Taskforce (TPT), a group of experts from the financial sector, academia, and civil society, who in November 2022 published the Disclosure Framework and Implementation Guidance.
The TPT's Disclosure Framework is designed to help companies develop and implement robust net zero transition plans.
The framework covers four key areas:
Governance: This includes information on how the company's board and management team are overseeing the net zero transition plan, and how the plan is integrated into the company's overall strategy and risk management framework;
Strategy: This includes information on the company's long-term net zero goals, as well as its interim targets and milestones and which strategies it is planning on using to decarbonise its operations or products;
Targets and metrics: The company should disclose its greenhouse gas emissions and other relevant metrics, as well as its targets for reducing these emissions over time. The company should also explain how it will measure and report on its progress towards its net zero goals.
Risk management: The company should identify and assess the risks that it faces in transitioning to net zero, and explain how it plans to mitigate these risks.
The TPT's Disclosure Framework is voluntary, but it is intended to provide companies with a consistent and transparent way to report on their efforts to transition to net zerand support the transition to a low-carbon economy. Investors and other stakeholders can then assess the credibility and ambition of companies' net zero transition plans, which shows transparency and accountability and serious commitment on behalf of the organisation, to reduce their emissions and supporting the net-zero transition.
Who is it for?
UK financial institutions
UK listed companies
This framework requires companies to define and publish their net-zero plans.
the recommendations around what constitutes a strong transition plan are:
Targets to mitigate, manage and respond to climate change, as well as what opportunities come with the transition
Short, medium and long term actions that the company is planning to take on to achieve its targets
Measures to address the material risks identified, and leverage opportunities for the environment and stakeholders which arise from these actions.
The TPT's Disclosure Framework is a valuable resource for companies that are developing and disclosing their net zero transition plans. The framework provides companies with a clear and concise set of guidelines that they can follow to ensure that their plans are robust and credible.