UK’s Transition Plan Taskforce unveils sector-specific guidance

The Transition Plan Taskforce (TPT), a UK government initiative to establish a ‘gold standard’ for corporate transition planning, has released sector-specific guidance to support companies in 30 industries.

Firms in consumer goods, extractives and minerals processing, financial services, food and beverages, healthcare, infrastructure, renewable and alternative energy, resource transformation, technology and communications as well as transportation now have access to best practice recommendations to build their climate transition plans.

The guidance is an extension of the TPT Disclosure Framework released in October 2023 after a year of  collaboration and consultation between the UK Treasury and leaders of industry, academia, and regulators, with a view of making the publication of climate transition plans mandatory in the country.

Now, each of the 30 sectors in the new guidance has access to an overview of its specific decarbonisation levers, metrics and targets, as well as key sources of guidance for a transition plan in that sector.

Oil and gas deep dive places the onus on Scope 3

In addition, the TPT has also published ‘Sector Deep Dives’ for seven critical industries: asset managers, asset owners, banks, electric utilities and power generators, food and beverage, metals and mining, and oil and gas.

For instance, the oil and gas deep dive recommends that entities “take a strategic and rounded approach to transition planning”, including rapid reductions in operational Scope 1 and 2 emissions, facing significant transition risks such as declining market demand for oil and gas, carbon pricing, and litigation risk, and reshaping their business models to accelerate the transition to a climate-resilient economy.

According to the TPT, oil and gas companies cannot claim to have a solid transition plan without tackling Scope 3 emissions – something most of them are currently reluctant to.

“Tackling Scope 3 emissions from the combustion of oil and gas by customers will be crucial, given these account for 80% of the lifecycle emissions of oil and 85% of the lifecycle emissions of gas,” notes the recommendation, noting that companies will have to reduce production “as demand shifts”.

Assessing impacts and dependencies

All the sector-specific deep dives also provide guidance on how companies should assess and disclose the impacts and dependencies of their transition plans. 

For example, a food processor should consider how its decision to source commodities exclusively from producers with verified deforestation commitments could impact small-scale farmers unable to afford the required certification: both the social tensions that may arise from this decision and the opportunity to engage early with these farmers and support their certification.

Meanwhile, a miner should clearly identify the parts of its transition plan that depend on natural ecosystems in order to increase climate resilience: for example, the consequences of a potential degradation of its tailing management system due to floods, and the opportunity to restore ecosystems around tailings to increase flood protection.

Read also: Climate resilience approaches (and budget considerations) for Chief Sustainability Officers