A Treasury task force explained today (9 Oct) how listed companies and financial firms will have to outline plans to cut carbon emissions in the transition to a 2050 net-zero economy.
The plans dovetail with pre-existing mandatory climate standards, which is set to be replaced by new measures from the International Sustainability Standards Board (ISSB).
The blueprint by the Transition Plan Taskforce (TPT) builds on the ISSB's plans and draws on work by the Glasgow Financial Alliance for Net Zero.
Companies will be expected to use the framework to disclose their transition plans for 2025 and onwards, which means the first reporting will be in 2026.
Joanna Penn, a junior Treasury minister in Parliament's upper house, said making transition plans mandatory is an essential part of Britain's plans to become the world's first net-zero financial centre:
"The transparency and accountability offered by transition plans are vital to the fundamental shift in business and finance required for the economy-wide transition to net zero and a climate-resilient future."
Michael Izza, chief executive of the Institute of Chartered Accountants in England and Wales (ICAEW), also praised the framework, saying:
"For the first time there is a definitive guide and insight into the risks and opportunities that surround the development and implementation of a climate transition plan".
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