IIF Authors

Status: Will be live at 03/01/2023 10:00

IIF Response to the UK Transition Plan Taskforce (TPT) Consultation

On February 28, 2023, the Institute of International Finance (IIF) responded on behalf of its global membership to the UK Transition Plan Taskforce (TPT) consultation on its Disclosure Framework and Implementation Guidance. The topic of transition planning is new and broad-ranging, with many important and complex aspects. The purpose of the IIF comment letter is to convey industry perspectives on the implications of the TPT framework for disclosure practices given the nature of the TPT consultation; however, it is important to recognize that transition planning is fundamentally an internal strategic exercise, and as such, not all components of a firm’s transition plan may be relevant or appropriate for public disclosure.

The IIF has welcomed the initiative of the International Sustainability Standards Board (ISSB) to develop a global baseline for climate-related disclosure standards. Across the world, many financial institutions are already making significant efforts to support the net zero transition through the development of transition plans and related strategies; however, as transition planning remains in its infancy, the TPT framework should provide enough flexibility for companies to evolve their disclosure as the understanding and development of transition planning evolves over time.

IIF members are broadly supportive of the objective of mainstreaming transition planning. However, given the nascent state of market practices and the evolving global standard setting process, many IIF members remain of the view that implementation of requirements for mandatory disclosure of transition plans may not be appropriate at the current time. Nonetheless, a minority of firms have indicated they would find greater standardization of frameworks for transition planning helpful, given the additional information it could provide about their clients and counterparties.

The response discusses the importance of any disclosure framework related to transition plans providing space for practices to mature and develop as experience with transition planning deepens and spreads across the economy. The ongoing development of market-led standards should be encouraged to ultimately feed into disclosure frameworks and requirements in an iterative way.
Generally, in order to support global consistency of climate-related disclosures, it is important to await the issuance of the ISSB standards, which the IFRS Foundation has indicated is expected by end-Q2 2023, becoming effective starting January 2024.

The comment letter also provides feedback on the sequencing of disclosure expectations, the content of disclosures related to transition plans, mechanisms to reduce liability and reputational risks, and the location of disclosures.