The introduction of new mandatory climate-related financial disclosures in Australia in January 2025 ushers in planning for net zero as standard practice for Australian companies. Reducing greenhouse gas emissions across the value chain requires thoughtful, long-term strategic planning. This can take shape as a climate transition plan, detailing how a company will prepare for and contribute to the global transition to net zero emissions.

Credible transition plans are one of the best ways for companies to demonstrate a genuine commitment to emissions reductions. This Australia-first credibility guide for corporate climate transition plans draws on and consolidates 34 global best practice resources, with input from a large number of Australia’s leading industry groups and climate transition experts. 

The guide offers 7 credibility criteria and 31 associated sub-criteria to enhance readers’ understanding of what a credible transition plan is and help them determine whether the transition plan they are preparing or using is credible. Companies and investors can use these criteria when developing or assessing climate transition plans, while governments and financial regulators can use them to inform policy and disclosure guidance.

The criteria focus on the mitigation of climate-related transition risks, including emissions reduction strategies, as well as transition-related opportunities. The guide also provides considerations on critical related challenges, particularly adapting to a changing climate, managing impacts and dependencies on nature and ensuring a just transition for communities and workers. 

The criteria can also enhance the credibility of other climate-related financial disclosures that overlap with transition plans.

Principles

1. Credible transition plans are sufficiently ambitious and feasible for emissions reductions in line with the Paris Agreement.
2. Credible transition plans are internally consistent and integrated into the company’s broader strategy to provide confidence that the strategy will be effectively implemented.
3. Credible transition plans are comprehensive, well-maintained and verifiable for users to make informed decisions.