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

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