EY has said that over 80% of UK listed firms say they are committed to becoming net zero by 2050 but 95% have not yet disclosed detailed transition plans.
78% of FTSE 100 companies have published partially developed plans that don’t yet address key questions on strategy and execution, while 17% remain in the early stages of plan development, EY says in a new research report. Of the 5% that have disclosed detailed plans, many still have work to do to fully align fully with the UK’s Transition Plan Taskforce guidance.
Only 5% of FTSE 100 companies have so far disclosed transition plans that would be deemed ‘credible’ or sufficiently detailed under draft Government guidance.
The UK Treasury’s Transition Plan Taskforce’s (TPT) Draft Disclosure Framework is set to be finalised this year following industry consultation and outlines guidance for companies to create decarbonisation plans that can be deemed “credible, useful, and consistent”. The Treasury pledges that all UK listed businesses and financial institutions will be required to publish net zero transition plans by 2023.
EY’s analysis finds that while 78% of FTSE 100 companies have disclosed partially-developed plans that include public targets to achieve net zero emissions by 2050, they have not yet adequately outlined how they will reach these targets, therefore missing key current TPT Framework requirements around strategy and execution. Seventeen per cent of FTSE 100 firms are still in the stage of setting targets and are yet to publicly disclose any actionable plans.
According to the research, just 5% of FTSE 100 businesses have disclosed plans that EY would consider to be sufficiently detailed to meet the TPT Framework guidance and have started to put these plans into action.
Rob Doepel, EY UK&I Managing Partner for Sustainability, says, “While the Government has previously said that listed companies will be expected to publish their transition plans this year, a final date hasn’t been disclosed. By setting a deadline, the Government would give much-needed certainty to the UK’s largest businesses and would send a clear message that inaction is not an option.
“The TPT’s draft Framework offers vital guidance around developing detailed, ambitious transition plans, but currently just a handful of the UK’s largest businesses appear to be on track. We expect the Framework to be finalised this year following a Government consultation, and, given the praise it received in the recent Skidmore Review, it’s expected to become mandatory. Businesses should now be clear about what credible, detailed plans need to look like, and should have a good idea about the direction regulation is moving in. There can be no excuse for being unprepared and the UK’s largest businesses need to push ahead with developing detailed, actionable plans that enable their organisations to transition and reap the benefits of net zero.”
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