Climate Transition Plans

Climate transition plans are a vital tool to demonstrate to investors, suppliers, customers and other key stakeholders that an organization is committed to achieving a 1.5-degree pathway transition, and that its business model will remain relevant (ie profitable) in a net-zero carbon economy.

CDP's latest report, The State of Play: 2023 Climate Transition Plan Disclosure, shines a spotlight on how far along organizations are on their journey to developing credible climate transition plans.

The State of Play: 2023 Climate Transition Plan disclosure

There is clear progress when it comes to businesses disclosing credible climate transition plans:

Disclosing through CDP enables organizations to disclose in a standardized and comparable way – this is essential as a plan is only as good as the data that informs it, and data is most useful to the market in this way.

41% of all repeat CDP disclosers report against “some”, “many”, or “all” of the key climate transition plan indicators. This compares to 30% of all companies disclosing for the first time. Almost all companies reporting against “all” of the 21 key indicators are repeat disclosers.

However, there are barriers to progress that remain consistent including strategy, target setting and financial planning, although significant progress has been made for financial planning.

• 140 companies disclosed sufficient information against the 21 indicators in CDP’s climate change questionnaire (up from 81 last year).
• The pace of credible climate transition plan uptake is too slow if we are to reduce emissions in line with a 1.5-degree pathway.
• As we see more and more convergence across emerging standards and frameworks, we expect to see the uptake of transition plans increase.

The report homes in on disclosure trends across the key industries, global indices and key elements involved in developing a climate transition plan – including targets and financial planning – and looks at industry and geographical trends across all climate transition plan elements.

Additional resources

CDP has produced a discussion paper for organizations to ensure their business model aligns with a net-zero economy. The high-level summary reviews and reflects the thinking drawn from other existing frameworks and related benchmarks, such as the Assessing the Low-Carbon Transition (ACT) framework, Science-Based Targets Initiative, Transition Pathways Initiative (TPI), CA100+ and the Climate Safe Lending Network.

CDP has also created a technical note with guidance on disclosing organizations can demonstrate that they have a credible climate transition plan in place.

Meanwhile you can download CDP's previous Climate Transition Plans report (published in February 2023).

You can also:

• browse further guidance for companies disclosing through CDP;
• learn how Assessing Low-Carbon Transition complements the EU's climate transition; and
• see how CDP is aligned with disclosure frameworks and standards.

In partnership with Say on Climate.