Most UK listed companies’ transition plans do not meet proposed government requirements
Published April 12, 2023
Only 5% of FTSE 100 companies have disclosed net zero transition plans that would be deemed sufficiently detailed under government guidance, research has found.
In 2021, the UK government pledged to require UK listed businesses to publish decarbonisation transition plans by 2023. Draft guidance issued by the government’s Transition Plan Taskforce (TPT) described the level of detail required for the plans to be deemed credible.
The findings are based on an assessment by professional services company EY of FTSE 100 transition plans against the TPT Draft Disclosure Framework. The guidance sets out how companies can create decarbonisation plans that are “credible, useful, and consistent”.
The remaining 95% of FTSE 100 companies includes 78% which have published plans deemed incomplete because they don’t yet fully address strategy and execution. The other 17% are said to still be in the early stages of transition plan development.
While listed UK companies scored well on the TPT guidance that described the requirements for objectives, their weakest scores were on how they intend to adapt business planning and operations, or to change their products and services.
Of the top five percent, many have work to do before their plans can be considered fully TPT-aligned. EY said this was due to gaps in areas such as financial planning or the definition of financial metrics and targets.
Commenting on the findings, Rob Doepel, EY UK&I Managing Partner for Sustainability, said “Businesses should now be clear about what credible, detailed plans need to look like, and should have a good idea about the direction regulation is moving in…The UK’s largest businesses need to push ahead with developing detailed, actionable plans that enable their organisations to transition and reap the benefits of net zero.”