The UK government has stepped up its focus on transition finance by extending the Transition Plan Taskforce’s (TPT) mandate until at least 31 July 2024 to align with the new Transition Finance Market Review (TFMR) – which was designed to explore how to create the conditions for scaling transition-focused capital raising with integrity.
The newly-launched review will also consider what the UK financial and professional services ecosystem needs to do to become a leading hub for, and provider of, transition financial services, by facilitating UK and international companies and investors to achieve credible net zero pathways.
By creating a period of overlap between the two processes, it will allow the TPT to fully contribute to the work of the review, while supporting the development of high-integrity transition approaches at home and abroad.
The TPT was originally set up on the back of COP26, where then-chancellor of the exchequer, Rishi Sunak, pledged to mandate climate strategies throughout the UK economy. The Treasury subsequently tasked TPT with designing expectations that regulators could use when they developed the rules.
Both processes were launched after the 2023 Green Finance Strategy announced that the government would commission a review into how the UK could become the best place in the world for raising transition capital.
As the global discussion on transition plans has progressed over the last few years, it has become clear that credible transition plans are expected to play a central role in the development of high-integrity transition finance approaches.
Beyond the UK, many jurisdictions and global multilateral initiatives are now considering the connections between the two.
The TPT’s technical work has been accompanied by ongoing international engagement which includes with the Financial Stability Board, IOSCO and the NGFS, as well as the G7, G20, UNFCCC and the Coalition of Finance Ministers for Climate Action.
Additionally, it published the TPT Disclosure Framework together with implementation guidance and draft sector guidance, informed by over 600 organisations around the world.
This year, the TPT will release its final outputs which includes a final deep dive sector guidance for asset owners and managers as well as a forward pathway on transition plans which considers the maintenance of a strong ecosystem around transition plans.
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