The national flag of UK.
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Britain on Monday laid out how listed companies and financial firms will have to detail their plans to cut polluting carbon emissions as they transition to a net zero economy by 2050.
The corporate "transition plans" dovetail with already mandatory climate-related disclosure that is due to be replaced by new standards from the International Sustainability Standards Board (ISSB).
The blueprint published on Monday by the Transition Plan Taskforce (TPT) builds on the ISSB norms, and draws on work by the Glasgow Financial Alliance for Net Zero or GFANZ.
“Backing up net zero ambitions with high quality and clear transition plans is crucial if we are to collectively deliver net zero," Amanda Blanc, Group CEO of insurer Aviva and co-chair of the taskforce, said in a statement.
"The TPT Disclosure Framework will help businesses understand just what makes a climate transition plan robust and credible."
The Financial Conduct Authority, which polices company listings, said firms should engage early and get started.
Joanna Penn, a junior treasury minister in Britain's upper house of parliament and co-chair of the taskforce, said making transition plans mandatory is part of Britain's commitment to becoming the world's first net-zero aligned financial centre.
“The transparency and accountability offered by transition plans is vital to the fundamental shift in business and finance that is required for the economy-wide transition to net zero and a climate resilient future," Penn said.
Companies will be expected to use the framework to disclose their transition plans for 2025 and onwards, meaning the first reporting would be in 2026.
"For the first time there is a definitive guide and insight into the risks and opportunities that surround the development and implementation of a climate transition plan," said Michael Izza, chief executive of the ICAEW, a professional accounting body.