On the 9th April, the Transition Plan Taskforce (TPT) hosted a London event with the theme ‘unlocking finance and growth through credible transition plans’. During the event, the chief executives and sustainability directors of several multi-billion dollar revenue firms shared their experiences of going through the transition planning process. The following takeaways emerged:
- Transition plans can go off track and won’t be immediately perfect.
A theme drawn on in the event was that transition plans will not be perfect from day one, and that there may be some bumps in the road. Alistair Phillips-Davies, CEO of energy firm SSE, referenced that transition plans are particularly “good for the tricky issues, helping to figure out where things have gone wrong”, allowing businesses to more easily pivot or adjust plans. - Decarbonization targets can create a tug-of-war down the value chain.
Different clients or suppliers may be further ahead or behind on their decarbonization journeys – and one organization’s targets can create ripple effects and incentives. Robin Mills, CEO of foodservice business Compass UK & Ireland, referenced this back-and-forth stakeholder relationship. Mills found that launching the firm’s transition plan in a conference, including many suppliers, customers and employees, helped establish ownership between divisions by creating a space to facilitate discussions and communicate plans. - Investors will need to support organizations on their climate transition journeys.
Acknowledging that the climate transition will be more difficult for some industries than others, Helen Dean, CEO of workplace pension scheme NEST, indicated that NEST try to stay invested and engaged for as long as possible to help businesses transition. Just using emissions data to make investing decisions may overshadow opportunities to help firms in heavy industries that are working to transition. She gave the example of a German chemical firm with high emissions from hydrogen plants that is investing around $1 billion in low carbon hydrogen and has pilot plants up and running.
For more information on climate transition planning, see the recent Verdantix report Best Practices: Developing A Corporate Climate Transition Plan.
