This is the real Carney. He’s now using our tax dollars to make this happen. And if you aren’t on board & not part of the solution, you are part of the problem.
This is the real Carney. He’s now using our tax dollars to make this happen. And if you aren’t on board & not part of the solution, you are part of the problem. pic.twitter.com/YiFDNb70uN
— Ryan Gerritsen🇨🇦🇳🇱 (@ryangerritsen) November 22, 2025
What is a Climate Transition Plan?
In this thorough piece, our experts explain what a climate transition plan is, its core components, and what to look out for.
A Climate Transition Plan (CTP) is a strategic summary of how businesses intend to transition to a sustainable economy and align their business operations with global climate goals, particularly the targets set by the Paris Agreement. This work is required by the Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standard E1 (ESRS E1).
The CSRD embeds the concept of double materiality, meaning companies must assess how their activities impact the environment and society (outside-in perspective) and how environmental changes affect their business operations (inside-out perspective). This dual focus underpins a company’s Climate Transition Plan, which acts as a summary for many of the other key decarbonisation-focused disclosure requirements in ESRS E1, the specific standard focused on climate change.
Climate Transition Plans (CTPs) will likely be the most important document that key stakeholders look at to judge how seriously companies are taking climate action. It will be easy to separate those well prepared from those papering over the cracks and planning for business as usual.
The CTP is in many regards a summary of key decarbonisation-related disclosure requirements from the rest of E1. Already from this point, it becomes quite complex: The plan brings together the foundational elements from the ‘Metrics and Targets’ section: E1-4 GHG targets (which in itself requires full knowledge of E1-6 scopes 1-3 emissions), together with a summary of Polices and Actions (E1-2 and E1-3).
https://www.ramboll.com/en-gb/insights/decarbonise-for-net-zero/what-is-a-climate-transition-plan
How a climate transition plan can strengthen your business model
Many companies set ambitious climate targets, but few have detailed plans to meet them and even fewer address the necessary transformation needed.
Climate transition plans (CTPs), which support this transformation, are crucial tools to guide strategy and build resilience to create value.
Companies should act now to develop CTPs, as the process requires thoughtful planning to engage the whole organization.
Recent shifts in the geopolitical landscape may signal declining prioritization and slower action on climate-related targets. The uncertain context leaves many organizations in doubt as to the level of support available from governments and access to funding for tackling decarbonization.
Requirements and regulations, along with stakeholder interest for transparency and demonstrated action are driving the need for climate transition plans.
Key Components of a Climate Transition Plan
A comprehensive climate transition plan consists of the following components:
Near-term and long term greenhouse gas (GHG) emissions reduction targets. A foundational piece of a climate transition plan is setting near-term and long term GHG emissions reduction targets. View EPA’s target setting guidance for more information on setting GHG emissions reduction targets.
Strategies to achieve targets within a defined timeframe. In a climate transition plan, organizations should disclose their strategies to achieve their near-term and long term GHG emission reduction targets. This can include supplemental graphics such as a decarbonization wedge chart that depicts the decarbonization pathways and strategies for achieving the goals. The example wedge chart below shows how a hypothetical organization plans to achieve a scope 1 and 2 GHG emissions reduction target. Strategies identified include renewable energy procurement, energy efficiency measures, electrification, and switching to low carbon fuels.
https://www.epa.gov/climateleadership/climate-transition-planning
h/t KeepIt