This new report, commissioned by the Department for Business, Energy and Industrial Strategy (BEIS), provides an analysis of how Net Zero transition plans and climate-related disclosures made by businesses under TCFD can drive changes in corporate behaviour and facilitate the flow of capital to companies that are positioning to drive the transition to a low-carbon economy. The study provides BEIS with an evidence base in this area.
The study was split into two phases:
- Phase 1: Reviewed transition plans developed by a sample of companies (excluding firms in the financial sector) to meet Paris aligned or Net Zero climate targets, and then drew out
common characteristics and examples of different ranges of best practice. - Phase 2: Aimed to understand plans and disclosures further, as well as the motivation for companies to set these targets, and barriers they may have faced.
The report:
- Explores the definition of Net Zero and how the lack of standardised definition can complicate expectations of what a transition plan should include;
- Outlines the drivers for companies to set targets and create a transition plan;
- Assesses companies’ existing transition plans; and
- Explores the challenges and barriers to developing and implementing transition plans.
The study also outlined next steps for identifying support for the private sector in contributing to the Net Zero agenda, including ensuring greater consistency across transition plans, providing support to develop transition plans, developing a robust and impartial verification process for transition plans, and including climate risk adaptation to the transition plan process.
