UK consults on sector-specific guidance for climate transition plans and disclosures

United Kingdom

In order to achieve the UK’s commitment of net-zero greenhouse gas (GHG) emissions by 2050, the UK government, in 2021, committed to move towards making the publication of climate transition plans mandatory, and announced the establishment of the Transition Plan Taskforce (TPT).

In October 2023, the TPT published its final sector-neutral Disclosure Framework. This has now been followed, on 13 November 2023, by the publication of seven “Sector Deep Dives” for consultation, setting out additional sector and specific guidance for asset managers, asset owners, banks, electric utilities and power generators, food and beverage, metals and mining and oil and gas. The seven Sector Deep Dives are intended to help these industries to interpret the final TPT Disclosure Framework in more detail for their sector.


The TPT aims to create a gold standard for private sector climate transition plans. It seeks to standardise and enhance the quality of these plans, enabling stakeholders to assess their credibility effectively.

In October 2023, the TPT published the final sector-neutral Disclosure Framework and a suite of Implementation Guidance which provides a set of good practice recommendations to help companies make high quality, consistent and comparable transition plan disclosures. The Framework outlines a four-stage process for preparing a transition plan: (i) baselining, (ii) setting ambition, (iii) developing an action plan, and (iv) ensuring accountability. Stakeholders are advised to publish their transition plans in standalone documents alongside annual financial reports, updated regularly.

The TPT suggests that transition plans include:

  • High-level ambitions to mitigate, manage and respond to the changing climate;
  • Short, medium and long term actions to achieve the strategic ambitions, including financing details;
  • Governance and accountability mechanisms that support delivery of the plan and robust periodic reporting; and
  • Measures to address risks to and opportunities for the natural environment and stakeholders.

The Framework was designed to align with the transition planning guidance developed by the Glasgow Financial Alliance for Net Zero, and to be consistent with, and build on, the ISSB climate-related disclosure standard (IFRS S2), published in June 2023. IFRS S2 includes provisions relevant to transition planning and the TPT framework provides disclosure recommendations to assist with those.

The sector-specific consultation

The TPT’s mandate includes producing guidance for select finance and real-economy sub-sectors comprising asset managers, asset owners, banks, electric utilities and power generators, food and beverage, metals and mining, and oil and gas. These sectors were chosen given the perceived significance of each sector’s respective greenhouse gas emissions, need for additional transition finance in the UK context, and the quality of existing guidance available in the market.

The TPT has launched a consultation for each sector with each consultation document containing general lines of inquiry which appear across all documents, and more specific sector related questions. The consultation is open until 29 December 2023 and participation is encouraged.

Some key general lines of inquiry include:

  • Strategic Approach: Do you find the relevant TPT sector guidance effective in supporting disclosure aligned with the TPT Disclosure Framework, emphasising a strategic and rounded approach?
  • Climate Resilience: Does the sector guidance sufficiently address how entities are responding to and contributing to the transition to a low-GHG emissions, climate-resilient economy?
  • Alignment Between Sectors: Is there adequate alignment between guidance for different sectors?

Some more specific lines of inquiry include:

  • Asset Managers: Does the guidance appropriately consider the fiduciary duty of Asset Managers to clients and other regulatory obligations?
  • Asset Owners: Is there sufficient alignment between the Asset Owners Guidance and the Asset Managers Guidance?/ Comment on the applicability of the Asset Owners Guidance to specific asset classes (e.g. infrastructure, real estate, fixed income).

Currently, the recommendations for both asset manager and asset owners focus on financed emissions, investment activities, stewardship and suggests that all asset classes should be included in the transition plans.

  • Banks: Is climate resilience sufficiently addressed in the banking sector guidance?/Assess the appropriateness of addressing housing and mortgages./Examine how incentives and remuneration are addressed and the complexity with transition plan metrics.

The Consultation recommends that banks address all of their operations in their transition plans – including lending, capital markets, sales, trading and advisory activities.

  • Electric Utilities and Power Generators: Do you agree with the focus on investment plans and associated capital expenditure?/ Do you think Renewable Energy Certificates have been appropriately addressed?

The Consultation recommends that electric utilities and power generators focus address electricity and do not include other business activities such as distribution or sale of heat.

  • Food and Beverage: Are disclosures related to the potential role of the sector as a supplier and seller of carbon credits sufficiently addressed?/Evaluate the coverage of each value chain stage.

The Consultation recommends that the entire value chain is included within the scope. The guidance is particularly applicable to agricultural producers and entities involved in seafood commodities. Processors and manufacturers, distributors and retailers, and food service entities should all be engaged.

  • Metals and Mining: Evaluate the treatment of thermal and metallurgical coal activities./Assess the guidance on non-operated assets, joint ventures, minority interests, and physical trading activities./ Consider the adequacy of addressing Scope 3 emissions and associated metrics and targets.

Entities operating in the exploration, development, extraction, comminution, and processing value chain stages are within scope. The Guidance does not apply to activities related to downstream use of material typically performed by other sectors, including design of technology and infrastructure, manufacturing, combustion, reuse, collection, and recycling, however, entities with a voice in downstream sectors are encourages to use their channels of influence.

  • Oil and Gas: Are operational metrics and targets, including methane emissions reduction and new oil & gas, appropriately and adequately addressed?/ Is the shift towards low-carbon products and services appropriately addressed in the business model?

Included within scope are upstream entities (including the development of both on-share and off-shore reserves), midstream entities (including physical trading of oil and gas products but excluding financial trading) and downstream entities (excluding those whose primary activity is gas distribution).

The Disclosure Framework sets out 19 Sub-Elements supported by a series of Disclosure Recommendations. Whilst entities are expected to disclose against all Sub-Elements, each consultation document requests additional sector-specific feedback on the most relevant Sub-Elements.

Potentially impacted entities should also bear in mind that the TPT’s work must be viewed within the wider UK (and international) regulatory and legislative landscape, with certain climate related disclosures already required in the UK by listed companies, asset managers and asset owners in particular. Consistency of approach is key and we anticipate that the TPT’s work will inform changes to current disclosure requirements and to future regulatory developments. It should also be borne in mind that these TPT developments and disclosures focus on climate, and not wider sustainability and ESG factors and metrics which are the subject of ongoing developments, in particular the UK’s current review of ‘non-financial’ information reporting requirements by corporates, and its planned Sustainability Disclosure Requirements (SDR) framework and publication of Sustainability Disclosure Standards (SDS) anticipated by July 2024.

The consultation on the TPT drafts will be open until 29 December 2023. Responses can be provided via this webpage for the relevant sector.

Feedback is also currently sought on the draft Sector Summary until 24 November 2023.