Nina Pimblett, who is sector guidance lead at the TPT, which is mandated by the UK government to develop a gold standard for transition plans, recommended treasurers consider the “bigger holistic picture to make sure you avoid any unintended consequences when writing a transition plan”.
Speaking at a session run by credit rating agency Fitch at the ACT Annual Conference, Pimblett said ambition “should be about preparing and making sure you're resilient to transition and contributing to an economy-wide transition”.
She gave the example of how assets might be “handed over to someone else who doesn’t care”, an approach that “might make your balance sheet look really green, but probably not the sort of right approach for how everything adds up in the transition”.
How you going to ensure the delivery of your plan that can include metrics and targets, so tracking how you get there?
When it comes to actions, Pimblett focused on the importance of engagement, not just with suppliers in the value chain, but in the wider arena, including other players such as industry peers or government, “to ensure you are doing your best to move this along”.
On accountability, she said: “How you going to ensure the delivery of your plan that can include metrics and targets, so tracking how you get there? What’s the sort of quantitative and qualitative focus that you hope to achieve?
“What are the governance mechanisms within your company to make sure people have the right responsibilities, perhaps into executive remuneration, performance reviews, those sorts of aspect?”
“Hopefully, once you've worked your way through all those elements and underlying sub elements, you should have a pretty comprehensive gold standard transition plan.”
ACT immediate past president Joanna Bonnett, who is representing treasurers on the Transition Finance Market Review (TFMR), said a big issue for treasurers is unlocking barriers to make transition finance easier.
Bonnett, until recently treasurer and chief sustainability officer of recruitment firm Page Group, said: “It’s a warts and all conversation we need to be having.”
In transitioning in the future, investors and market participants need more data, more clarity and more standardisation
From a financing perspective, Steffen Kram, managing director, corporate and investment banking at Spanish banking giant Santander, said: “An economy-wide process that is successfully implemented will lead to products supporting the transition.”
He added that a transition will be specific to the economic situation in each country. “There is not one monolithic concept of transition. I think there are various transitions, with multi-speeds, that are multi-fuelled,” he added.
David Reynolds, managing director, ESG financing advisory, at French bank BNP Paribas, said: “I think it is important that a company has a framework to be able to really understand where it is now, and what is needed to go from A to B.
“When investors look at this, they really need to understand that it’s not just a lot of writing on a page, but that there’s a business strategy behind this,” he added.
Craig Gosnell, senior director, ESG/sustainability at Fitch, said: “In transitioning in the future, investors and market participants need more data, more clarity and more standardisation.”
Pimblett, talking shortly before the UK general election date was announced, said that the current government had committed to endorsing the ISSB (International Sustainability Standards Board) framework by the first quarter of 2025, enabling the FCA (Financial Conduct Authority) to begin its consultation on the issue.
Lawrie Holmes is a freelance business and finance journalist
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