By Kate Levick, Associate Director, Finance & Resilience, E3G, and Co-Head, TPT Secretariat.
E3G welcomes the announcement by the IFRS Foundation on 24 July 2024 during London Climate Action Week that it will assume responsibility for disclosure-specific materials developed by the Transition Plan Taskforce (TPT). This means that the TPT resources for best practice private sector transition plans will become part of the complementary ISSB resources for sustainability standards.
In the near term the IFRS Foundation expects to use the relevant TPT materials to develop educational materials for users and preparers of transition plans. Over time the IFRS Foundation may make further use of these materials when considering the need to enhance the formal application guidance within IFRS S2.
The TPT has produced a Disclosure Framework which sets out good practice for robust and credible transition plan disclosures across the financial sector and real economy, together with a broad suite of associated guidance. All of these outputs can be found on the TPT website.
The TPT Disclosure Framework is designed to complement, and build on, the wider climate-related disclosures in the IFRS S1 and S2 Standards. The decision by the IFRS Foundation to assume responsibility for the Framework and associated materials is a recognition of the high technical quality of, and the widespread international interest in, the TPT’s work.
Today’s announcement brings the technical work of the TPT to a successful close. The TPT will continue working to support the UK’s Transition Finance Market Review over coming months.
E3G is a co-host of the TPT Secretariat, jointly with the UK Centre for Greening Finance & Investment (CGFI). When E3G was initially invited to take on this responsibility two and a half years ago we had already been working on the transition plan topic for some time, recognising the crucially important role that private sector transition plans could play within wider efforts to meet the mitigation, adaptation, and finance goals of the Paris Agreement.
Today, private sector transition plans are now widely recognised around the world as being a key tool for financing the transition and are under discussion in the G20 Sustainable Finance Working Group as well as in other multilateral forums. In addition, publication and use of transition plans is growing quickly and many different forward challenges and opportunities are emerging as they start to become a market norm.
Planning for economy-wide climate transition is vital, and E3G will continue to support the development and implementation worldwide of robust and credible climate transition plans which help countries to meet their climate goals.
E3G’s contribution will be made both through its role as co-host of the TPT Secretariat, and through its independent forward work program which will endeavour to drive further progress including supporting the growing community of practice that exists around transition plans.
News about next steps on both these fronts will be forthcoming later in 2024.
