The UK’s Transition Plan Taskforce (TPT) has revealed its new disclosure framework on climate-related transition risks, which could soon become a reporting standard for FCA regulated entities.
The UK’s Transition Plan Taskforce, an initiative launched by the UK government during COP26 is aimed enhancing disclosure standards on meeting climate targets, managing climate related risks and contributing to economy-wide climate transition.
The new framework distinguishes between ambitions, actions and accountability with investors being not just required to outline their ambitions on net zero and the actions they plan to take in implementing them, but also linking compliance to board oversight and reporting and even financial remuneration.
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The new disclosure standards could come into force for the 2025 accounting period with reporting to begin from 2026 on.
UK-listed asset managers and owners with more than £5bn in assets are in most cases already required to disclose TCFD reports, but the TPT framework could go beyond that, as Sam Gill, co-founder and COO at Carbon data provider Sylvera explains.
“The proposed disclosures include not just emissions reduction measures but also carbon credit activity – a boon for further transparency and clarity to how companies engage with the carbon markets.
“Put into regulation, such disclosures would be a big step forward for kicking corporate climate action into gear. With better data, we can hold companies to account and make sure they’re making progress on climate, not just putting forward plans.
“However, disclosures are only the first step. To truly drive net zero forward, we need governments to increase focus on decarbonisation delivery sector by sector” he stresses.
The announcement has also been welcomed by GFANZ chair Mary Schapiro. “This framework, which builds on the best practice framework developed by GFANZ in 2022, will play a critical role in ensuring that UK companies and financial institutions develop and disclose credible and comprehensive transition plans needed to drive the net zero transition” she said.
The new TPT reporting framework is set up to complement and build on the International Sustainability Standards Board (ISSB) and draw on the Glasgow Financial Alliance for Net Zero (GFANZ) framework for transition planning.
