Navigating the transition: Three tips for integrating climate into strategy and decision making

Transcript

Climate transition plans are explicitly required under incoming disclosure standards. Developing them may be a tricky process. Because they represent a holistic view of your organisation's management of climate risks and opportunities, as well as decarbonisation ambitions.

For a while now, Baringa has been helping organizations to develop and disclose their climate transition plans. We share three tips to get you on the right track when starting out.

Firstly, leverage the UK’s Transition Plan Taskforce. It is the global gold standard and provides actionable guidance for navigating the transition planning process.

Secondly, engage early with your largest emitters. It is crucial for developing a pragmatic plan that aligns with stakeholder expectations and promotes decarbonization.

Lastly, remember that a good transition plan comprises good business strategy. Moving to a sustainable business model is not just about compliance or risk management. It's about building a business that is more financially resilient to climate change and able to capitalize on opportunities that emerge as the economy decarbonises.

Reach out to Baringa if you need help getting started.

The Australian Accounting Standards Board’s (AASB) proposed disclosure requirements compel firms to reveal how climate change impacts their strategy and decision-making processes, and ultimately informs an organisation’s climate change transition plan.

Our assessment of Australia's 100 largest financial services firms highlights the challenges organisations face in disclosing their transition plans. Below, we outline three things to remember when embarking on transition planning for the first time.

1. Leverage existing guidance and frameworks

Baringa worked closely with the UK’s Transition Plan Taskforce (TPT) whose guidance stands out as the gold standard globally, providing actionable, robust guidance for navigating the complexities of climate-related transition planning. The recommendations offer a solid foundation for firms to build upon, ensuring their strategies are in line with best practice.

2. Engage and use your influence

Financial institutions have a powerful voice that can influence a wide range of stakeholders, from governments to corporations and industry bodies. Early engagement with your clients is crucial for developing a pragmatic plan that not only aligns with stakeholder expectations but also promotes decarbonisation. A clear transition plan sets the standard for future engagement with customers and broader stakeholders.

3. Remember: A good transition plan is just a good business plan

Transitioning to a sustainable business model is not just about compliance or risk management; it's about building a business that is more financially resilient to climate change and other material externalities, a business that will continue to thrive into the future.

Find out more by downloading our latest report, Beyond box-ticking or to discuss the points raised in this article, please reach out to a member of the team below.

Our Experts

Chris Nott

Partner, expert in Financial Services

Contact Chris

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