Bumper week for transition plan developments
UK’s advisory body calls on industry to co-create sectoral pathways as Adidas and others publish their climate strategies
Companies are being urged to work with governments and investors to help develop sectoral climate transition plans.
The recommendation was made as part of an update from the UK’s Transition Finance Council this week, which included proposed next steps to encourage investments into corporate decarbonisation and resilience.
The Council said industry should “co-create and use” sectoral plans to shape their own transition plans, and launched guidance on how to integrate finance into sectoral and technological pathways.
“Developed alongside the Net Zero Council, [the guidance] is designed to help government, industry and finance work together to develop actionable plans that unlock investment in high-emitting sectors,” said the Council.
It will now work on creating “deep-dive sector transition plans” with a focus on the financial case for long-duration energy story and green cement.
The progress report called for more macroeconomic interventions, in the form of subsidies, tax breaks and public procurement rules, to make investing in the transition “the economic choice”.
The UK should consider mirroring the European Central Bank’s recent decision to add a ‘climate factor’ into the way it valued corporate bonds, the Council suggested, and should embed clearer penalties and incentives around the use of sustainability-related product standards.
In August, the Council published its first entity-level guidelines for transition finance, providing a voluntary framework to help companies access capital to fund their transition.
A second consultation is due ahead of COP30 in November, and an updated version of the guidance will be published in March 2026, along with implementing guidance and a second progress report.
The updates come amid a busy week for transition planning and finance.
The UK’s department for energy security and net zero closed a public consultation on the introduction of private-sector transition plan requirements on Wednesday.
More companies have been taking the plunge voluntarily, with Adidas, ABB and Useful Simple Trust among those to publish entity-level plans this week.
Adidas’s climate director, Jesus Aisa, acknowledged that decarbonising in line with its new plan would be “challenging” and that it required a “collective effort”.
That collective effort was at the centre of a recent guide from the World Business Council on Sustainable Development about how companies should deal with their reliance on other stakeholders’ actions to achieve their own climate transition.
“If you’re a corporate developing a serious transition plan, you will quickly come across physical and non-physical dependencies,” explained the guide’s co-author, Mark Manning.
“The important thing is that those dependencies don’t become a reason to just hold your hands up and say, ‘it’s out of our control, and therefore we can’t transition’.”
He told Real Economy Progress the guidance sought to help companies identify their dependencies, “work out what they need to see from other agents in the ecosystem – including policymakers – to ensure progress; and then engage those agents in a very clear, purposeful and targeted way to co-create solutions”.
Manning had a proposal for ‘transition-planning coordination architecture’ published in SSRN this week, which he co-authored with fellow London School of Economics researcher Valentin Jahn.