Ernst & Young have sifted through the Net Zero transition plan material released by FTSE100 companies to the end of January and found that only 5% have published detailed plans. It is also quite possible that some of those do not necessarily meet the guidance set out in the Transition Plan Taskforce’s (TPT) Draft Disclosure Framework.
In January 2022, the Financial Conduct Authority introduced rules for listed companies and large asset owners and managers to disclose their transition plans as part of the Task Force on Climate-Related Financial Disclosures, initially on a comply-or-explain basis. The first disclosures under these rules are due this year.
EY’s research found that although 78% of FTSE 100 companies have disclosed partially-developed plans that include public targets to achieve Net Zero emissions by 2050, they have not properly explained how they will reach these targets, as required by the TPT Framework. 17% per cent of FTSE 100 firms are still in the process of setting targets and are yet to publicly disclose any actionable plans.
Commenting on the findings, Rob Doepel, EY UK&I Managing Partner for Sustainability, said: ‘While the Government has previously said that listed companies will be expected to publish their transition plans this year, a final date hasn’t been disclosed. By setting a deadline, the Government would give much-needed certainty to the UK’s largest businesses and would send a clear message that inaction is not an option.
‘The TPT’s draft Framework offers vital guidance around developing detailed, ambitious transition plans, but currently just a handful of the UK’s largest businesses appear to be on track. We expect the Framework to be finalised this year following a Government consultation, and, given the praise it received in the recent Skidmore Review, it’s expected to become mandatory. 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. There can be no excuse for being unprepared and 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.’