As companies start to adapt to regulations such as CSRD and CSDDD, they are quickly recognising that one of their obligations is to develop a Climate Transition Plan. Designed to provide a roadmap to help a company mitigate physical climate risks and navigate transition risks, Climate Transition Plans are a critical part of any businesses sustainability strategy. In this article, we explore what it takes to develop effective Climate Transition Plans.
What Are Climate Transition Plans?
Climate Transition Plans are a strategic roadmap outlining how a company will reduce its greenhouse gas emissions, adapt to climate-related risks, and capitalise on opportunities arising from the shift to a low-carbon economy.
Key elements of a climate transition plan include:
- Emission reduction targets: Clear, measurable targets for reducing emissions across all scopes (direct, indirect, and supply chain-related emissions).
- Risk assessments: Identification of both physical risks (such as extreme weather) and transition risks (such as regulatory obligations and shifting consumer preferences).
- Scenario analysis: Evaluation of how different global temperature pathways (e.g., 1.5°C, 3°C) could impact business operations and supply chains.
- Governance: Clear accountability structures to ensure the plan’s implementation, with board oversight and dedicated sustainability teams.
- Stakeholder engagement: Continuous engagement with investors, customers, suppliers, and employees to align on climate goals, foster collaboration, and ensure a just transition.
A well-developed climate transition plan helps businesses manage risks, align with regulatory requirements, and unlock new opportunities for innovation and operational efficiency.
Climate Transition Plans Development Guidance
Whilst the EU regulations require in scope companies to develop Climate Transition Plans (CTP), they are not explicit about the requirements. Several sections of ESRS, the reporting standards within CSRD, reference what should be included, but there is no explicit guidance. For that, we have to look elsewhere.
Several organisations have already published information on how transition plans should be developed. These include the Taskforce for Climate Related Finance Disclosures (TCFD), the Carbon Disclosure Project (CDP) and the Science Based Targets Initiative (SBTi).
From our work with clients, we’ve found that the guidance provided by the Transition Plan Taskforce (TPT) provides the most useful. The TPT has developed a framework along with sector specific guidance which provides a robust approach, covering all of the relevant information companies should include in a CTP.
Core Principles
The TPT Disclosure Framework sets out three core principles which companies should develop their CTP’s by:
Ambition: The framework focuses on three inter-related elements within any plan: Decarbonising the business, responding to risks and opportunities, and contributing to broader market shifts towards a sustainable economy. These should all be reflected in the ambition set by the company.
Additionally, when developing their plans, companies should recognise the possible impacts of their transition and how they can support a just transition.
Action: The plan should make clear the actual steps the company is taking to turn the ambition into action. This should prioritise decarbonisation through emissions reduction. It should set out the short term actions to put in place risk mitigations and adaptations to address preparations across the business.
Actions should also focus on how long term decisions will take climate change into account going forwards. Taking preventative measures against locking in climate risks to the business.
Accountability: As with any business strategy, the transition of the business should be fully integrated into the governance of the company. Roles and responsibilities should be clear and the oversight well defined.
The plan should be made public, enabling stakeholders to hold the management to account. The plan should also be dynamic to respond as new information comes to the business as the implementation proceeds.
Elements of A Plan
A good transition plan needs to include a significant amount of information. The TPT framework identifies 5 main subject areas to help guide companies.
Foundations: This section introduces the plan and sets the context. It is where the company describes its ambitions, the business model, and its value chain. Assumptions used in the development of the plan are also included.
Implementation Strategy: This is where the actions the company plans to take to realise its ambitions are described.
Engagement Strategy: Transition plans need significant collaboration and engagement to be successful. In this section, the company describes its stakeholder engagement strategy to support the plan.
Metrics and Targets: To determine the progress and success of the plan, clear metrics and targets must be defined to help monitor it.
Governance: Achieving the ambition must be well managed. Setting out the approach to management and governance gives stakeholders, internally and externally, clarity and assurance on the approach.
Our Process
From the work we’ve done with clients, we’ve developed a comprehensive approach to developing transition plans. There’s a lot of work to do, but taken step by step it becomes a manageable process. Most companies have already carried out activities to support the plan and our method makes sure all the work done to date is used effectively.
Our process follows the four phases described in the TPT Framework: Reassess – Ambition – Plan – Implement.
These phases break down further into 6 stages of practical activity.
- Risk and Opportunity Assessment – Using multiple methods and techniques, identify the risks and opportunities relevant to the business. This should include a Climate Scenario Analysis and Materiality Assessment.
- Strategy Development – Identify the ambition of the business and develop a transition strategy to guide actions.
- Target Setting – Define the concrete targets and milestones to guide the activities.
- Action Identification and Prioritisation – Build a long list of actions and then rigorously prioritise aligned to strategy and targets..
- Implementation Planning – Develop the detailed business plans to put the plan into action.
- Monitoring, Reporting and Alignment – Ongoing management of the implementation along with public disclosure.
How Jordisk can Help
Climate transition plans are not just regulatory obligations—they’re strategic tools that enhance your company’s resilience, unlock new opportunities, and ensure long-term sustainability. With Jordisk as your partner, you can develop a plan that aligns with global regulations and supports a Just Transition, ensuring your business remains competitive, compliant, and future-ready.
Contact us today to start building your climate transition plan and secure a sustainable future for your business.
