Document scope

The report provides a harmonised framework and guidance for assessing the credibility of corporate climate transition plans. It is designed for assessors and analysts who need to evaluate plans beyond disclosure compliance, focusing on whether plans are aligned with global decarbonisation goals, internally coherent, and feasible within stated timelines. The scope centres on climate mitigation and decarbonisation.

Introduction to transition plans

The report notes that while many companies have announced climate targets, far fewer have credible transition plans to deliver them. Transition plans are framed as strategic and operational tools rather than reporting exercises. The proliferation of disclosure frameworks and assessment methodologies has created inconsistency, reinforcing the need for a common assessment approach to support comparability and informed decision-making.

Company transition plan content and use cases

A company transition plan is defined as a forward-looking process describing how strategy, operations, and investments align with climate objectives. Across existing frameworks, five core elements consistently appear: strategic ambition; metrics and targets; implementation strategy; engagement strategy; and governance. Plans should explain impacts on business models and value chains, quantify investments (CapEx, OpEx, R&D), and address potential locked-in emissions from assets and products. Use cases include informing investors, regulators, and internal decision-makers.

Sectoral transition plan

Credible company plans should be assessed against relevant sectoral transition plans and decarbonisation pathways. These provide benchmarks for targets, technology choices, and investment levels. Where regional or national sectoral pathways exist, they offer more context-specific guidance, although availability remains uneven. Assessors are encouraged to use such pathways where possible, while recognising dependencies on policy, capital, and infrastructure that may constrain delivery.

Principles for assessment

Four principles guide assessment: relevance, transparency and completeness; ambition and feasibility; consistency; and long-term value. Feasibility depends on internal factors such as governance, skills, and investment capacity, as well as external dependencies including regulation, infrastructure, technology readiness, and resource availability. Consistency requires that targets, actions, and financial plans reinforce rather than contradict each other.

Assessment framework

The framework defines credibility through “triple consistency”: alignment of ambition with international climate objectives; consistency with relevant sectoral and local transition plans; and implementation of feasible mitigation actions and decarbonisation levers within the proposed timeframe. Compliance with disclosure standards is a necessary starting point but is not sufficient to demonstrate credibility.

Assessment items, red flags and assessment criteria

Assessment criteria cover greenhouse gas accounting and performance, targets, decarbonisation levers, governance, financial elements, and engagement strategies. The framework identifies common red flags, such as incomplete emissions coverage, unsubstantiated targets, lack of asset-level detail, or missing financial information. Financial elements are treated as fundamental: the absence of quantified CapEx, OpEx, or revenue alignment with transition actions is itself a red flag. Assessors are encouraged to compare proposed investments with sectoral decarbonisation needs.

Transition plan categorization

The report does not prescribe scoring, weighting, or thresholds. Instead, it outlines indicative categories of transition readiness, ranging from companies without a credible plan, through those with commitments but significant gaps, to companies aligning or on track to deliver their transition. Transparency about assessment methods and criteria is emphasised to support comparability and market confidence.