ACCA welcomes the Department for Energy Security and Net Zero (DESNZ) consultation on transition planning requirements. We believe that transition plans are a critical tool in the delivery of net zero and wider sustainability goals. To be effective, such plans must be credible, actionable, and aligned with science-based targets - while also being proportionate and practical to implement.
Transition planning requirements are critical for advancing the UK’s Modern Industrial Strategy as they support the shift toward a low-carbon, resource-efficient economy. Credible, forward-looking transition plans help businesses align with national climate goals, strengthen market confidence, and attract investment into future-focused industries critical to the UK’s long-term economic resilience and competitiveness. Transition planning will be key to helping businesses and investors seize the opportunities presented by the net zero transition and achieve the UK’s ambition to become a clean energy superpower.
We believe the UK is well positioned to lead in this area by building on global frameworks such as the IFRS Sustainability Disclosure Standards and the Transition Plan Taskforce (TPT) Disclosure Framework. These offer a coherent foundation to support both international alignment and interoperability—principles that ACCA consistently advocates for to avoid regulatory fragmentation and minimise reporting burdens, especially for multinational organisations.
ACCA recognises and appreciates that this consultation has been released alongside the exposure drafts for the UK Sustainability Reporting Standards: UK SRS S1 and UK SRS S2. We recommend that any transition plan requirements for measuring and disclosing climate-related risks and opportunities are grounded in UK SRS S2.
We recognise the increasing demand from investors, regulators, and other stakeholders for clear transition-related disclosures. To be able to assess their exposure and effectively allocate capital, investors need relevant, comparable, consistent, and decision-useful information about companies and their management of climate-related risks and opportunities. Clear transition-related disclosures are critical to enabling entities to access capital. This is particularly important in light of recent withdrawals by certain financial institutions from sustainable finance alliances—such as the Glasgow Financial Alliance for Net Zero—which have traditionally played a key role in promoting standardisation and best practice. When developing transition plan requirements, it is essential for DESNZ to adopt a proportionate approach, particularly in relation to SMEs and entities in emerging market and developing economies (EMDEs). SMEs play a vital role in the net zero transition but face growing regulatory and reporting pressures. Supporting their capacity early on will be key to ensuring their long-term sustainability and contribution to climate goals. Similarly, entities in EMDEs often operate in distinct regulatory and market environments, which may not align with UK or international frameworks. Recognising these differences is important to avoid creating unintended barriers and to promote inclusive participation in the global transition.
We recognise the urgency of addressing the climate emergency and support the need for swift action. However, transition plan requirements must also reflect market realities, including current talent and skills shortages, as well as the potential impacts on the UK’s market competitiveness and investment attractiveness. To be effective, these requirements should strike a balance—encouraging meaningful organisational change without imposing disproportionate administrative burdens, particularly where the costs of compliance may outweigh the benefits.
To read our comments in full, please download the document found on this page.
