Huge welcome for launch of ‘gold standard’ TPT Disclosure Framework

The Transition Plan Taskforce has published a press release to inform of the launch of the „Gold Standard“ TPT Disclosure Framework which was introduced during an inaugural event at the London Stock Exchange. The TPT Disclosure Framework is based upon the sustainability disclosure standards – IFRS S1 and IFRS S2 – of the International Sustainability Standards Board (ISSB) and recommendations of the Glasgow Financial Alliance for Net Zero (GFANZ) as to financial market and real-economy transition planning, including the key elements of a transition plan to be credible and comprehensive and tools to „support the development, creation and implementation of a company’s net zero transition plan“.
The TPT Disclosure Framework offers a basis for companies to outline credible and robust climate transition plans in their annual business strategy reports, making reports more consistent and comparable across companies. The framework also includes additional guidance for preparing and using climate transition plans, such as sector-specific guidance, climate planning cycle guidance, technical comparisons with other reporting frameworks, legal considerations, and web-based implementation guidance.
##### The key components of the TPT Disclosure Framework for presenting transition plans are:
(1) Foundations: Entities must reveal their strategic ambition, which includes their objectives and priorities for contributing to the transition. They should explain how they are pursuing these goals while considering opportunities, avoiding adverse impacts on stakeholders and the environment, and safeguarding natural resources. Additionally, entities should discuss how this transition plan affects their business model and value chain, along with key assumptions and external factors influencing the plan.
(2) Implementation strategy: Entities should disclose the specific actions taken within their business operations, products, services, and policies to realize their strategic ambition. They must also detail the financial implications of these actions on their financial position, performance, and cash flows.
(3) Engagement strategy: Entities need to describe their engagement with various stakeholders, such as industry peers, government, public sector, communities, and civil society, in pursuit of their strategic ambition.
(4) Metrics & targets: Entities are required to disclose the metrics and targets they are using to measure and monitor progress toward their strategic ambition.
(5) Governance: Entities should reveal how they are incorporating their transition plan into their governance structures and organizational arrangements to achieve their strategic ambition.
Graphic 1 – Key Components of the TPT Disclosure Framework

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Further details on each component are included in the document.