NEWS and EVENTS
18 September 2024
TCFD Consortium has published the “Transition Plan Guidebook”
The TCFD has discussed transition plans in its 2021 publications “Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures” and “Guidance on Metrics, Targets, and Transition Plans” and defined it as an "aspect of an organization’s overall business strategy that lays out a set of targets and actions supporting its transition toward a low-carbon economy, including actions such as reducing its GHG emissions". A similar definition is included in IFRS S2 (Climate-related Disclosure) published in 2023. In addition to these, various other initiatives, such as the TPT in the United Kingdom, have discussed the transition plan.
In response to these developments, the TCFD Consortium has taken up transition plan as one of its major issues since 2023. Based on the discussions, the TCFD Consortium positioned the transition plan as " Decision-useful information that provides the clearest possible picture of how a company can balance value creation with the transition to a low-carbon, decarbonized society", and identified three basic elements: (1) transition to a low-carbon, decarbonized society, (2) alignment with business strategy, and (3) reaching out to others.
This guidebook summarizes the outcome of the discussions by the TCFD Consortium and aims to contribute to the consideration of the transition plan by companies and investors, including case studies.
Structure of the Transition Plan Guidebook
Chapter 1 Purpose and Background
This chapter describes the purpose of this guidebook, the background and history of its formulation (trends in GX League, TCFD Consortium, etc.), as well as the structure of this guidebook.
Chapter 2 Overview of the Discussion on Transition Plan
This chapter explains the definition of transition plan as seen in TCFD and IFRS S2, and the status of discussion of transition plan in other frameworks such as TPT. This is followed by description of the three basic concepts of transition plan which is the outcome of the discussion by the TCFD Consortium.
Chapter 3 How Companies can Formulate Transition Plans
This chapter explains companies that should formulate transition plans, timing of formulation, organizational structure for formulation, contents to be included in transition plans, and methods of disclose.
Chapter 4 Summary
An overall summary of discussion is described.
Case Examples
A compilation of corporate disclosure is included, which would serve as a useful reference in disclosure of the transition plan.