CEOs from business, finance and environmental groups including WWF, E3G, the UK Sustainable Investment and Finance Association (UKSIF) and the Aldersgate Group wrote to the UK Prime Minister Andy Burnham urging him to keep the government’s promise to require large companies and financial institutions to publish plans on how they will tackle climate change.
Labour’s 2024 manifesto committed to requiring UK-regulated financial institutions and FTSE 100 companies to develop and implement credible transition plans. However, the government has yet to respond to the Department for Energy Security and Net Zero’s consultation, which closed more than a year ago. The letter calls on the government to fast-track its response and set out a timeline for a mandatory requirement for all large and listed companies to develop and disclose transition plans.
Transition plans give the clarity businesses need to ensure their operations and investments align with their own and the government’s climate and nature goals and build resilience to climate risks. They also enable boards to identify business opportunities in tackling the climate and nature crisis.
Reducing emissions, boosting growth and developing economic resilience will require strong action within the private sector. Business transition plans are critical for delivering and shaping the Carbon Budget Growth and Delivery Plan, which is central to the government’s ambition to deliver growth in every postcode and transition to a secure, clean and affordable energy system.
Almost three-quarters of FTSE100 companies are doing some form of transition planning voluntarily, but for the government to meet its ambition to make the UK the world’s leading green finance centre, all large listed businesses and financial institutions must do so. A lack of consistent information across the market prevents investors backing companies that are taking action.
The UK was previously seen as a leader on transition planning. Following COP26, government and industry co-convened the Transition Plan Taskforce, which launched a world-leading framework for business transition plans at the London Stock Exchange in 2023. This guidance has informed global norms and best practice on transition plans, including nature, adaptation and a just transition.
However, the letter warns that UK leadership is being eroded as other jurisdictions move further faster. Competitor jurisdictions such as the EU, Japan and Singapore are moving ahead, many with mandatory rules on transition plans.
The signatories urge the UK government to honour its manifesto commitment, provide certainty for businesses and confirm a timeline for a mandatory climate transition plan requirement at the COP31 climate summit.
Read the full letter here.
