Government takes a positive step with its transition plan consultation, but getting the balance right will be key - Claire Jones, LCP

The Government has announced its consultation on climate-related transition plan requirements.

Claire Jones, Partner and Head of Responsible Investment at LCP, commented:

“We are pleased that the Government is starting to move forward with its manifesto commitment to require certain UK companies and financial institutions to develop and implement credible climate transition plans. Today’s consultation launch is an important first step. A requirement to prepare and implement transition plans could help align the UK corporate and financial sectors with the UK’s commitment to reach net zero emissions by 2050. This is important for our pension scheme clients because, by limiting climate change, it will help to prevent damage to the economy and financial markets on which their members’ pensions depend.

“It’s really important, though, that the new requirements get the balance right between enabling and encouraging actions from companies and financial institutions to reduce emissions while also respecting their legal duties to shareholders and savers and not creating a disproportionate reporting burden. We look forward to responding to the consultation.”