OECD HomeEnvironmentOECD Guidance on Transition Finance - Ensuring Credibility of Corporate Climate Transition Plans - en
OECD Guidance on Transition Finance
Ensuring Credibility of Corporate Climate Transition Plans
This guidance sets out elements of credible corporate climate transition plans, which
aim to align with the temperature goal of the Paris Agreement. Such plans are needed
to address the growing risk of greenwashing in transition finance and facilitate a
global, whole-of-economy climate transition. Based on extensive stakeholder consultations,
including an industry survey, the guidance provides market actors, policy makers,
and regulators with a comprehensive overview of existing transition finance approaches,
identifying the main challenges and solutions. The guidance is relevant to: (i) policy-makers
and regulators seeking to develop or revise relevant policy frameworks or regulations;
(ii) corporates developing transition plans and seeking to identify the most salient
elements of existing initiatives; and (iii) financial market participants planning
to provide finance for the implementation of net-zero strategies. The guidance emphasises
greater transparency, comparability and granularity in corporate transition plans,
and the need for adequate environmental and social safeguards. In light of challenges
for some corporates, especially in emerging markets and developing economies, and
the risk of excluding key actors from transition finance, the guidance highlights
the need for policy-makers to take stronger action to bolster domestic enabling environments
for transformative investments.
watch the replay: "Moving the world economy to net zero: the role of transition finance and planning"
Market actors and jurisdictions have ramped up efforts around transition finance, such as developing taxonomies and guidelines. But transition finance is often criticised for opening the door to greenwashing and risking emission-intensive lock-in. How can we ensure the development of robust corporate transition plans to support credible and meaningful transition investments towards net zero? And how can emission-intensive lock-in and greenwashing be avoided?
On 16 February 2023 we discussed transition finance and transition planning, their importance for moving to net-zero pathways in hard-to-abate sectors and emerging markets and developing economies, as well as outstanding challenges in this space. The presentation drew from the recent report OECD Guidance on Transition Finance: Ensuring Credibility of Corporate Climate Transition Plans, which proposes 10 key elements to help corporates in developing transition plans, financiers to identify credible investment opportunities, and policymakers to develop strong policy frameworks.
Speakers included: Jo Tyndall, Director, OECD Environment Directorate; Mathilde Mesnard, Deputy Director, OECD Environment Directorate; Elia Trippel and Valentina Bellesi, Green Finance and Investment Team, OECD Environment Directorate; Charlotte Gardes-Landolfini, Climate Change, Energy and Financial Stability Expert, IMF; and Eugene Wong, CEO, Sustainable Finance Institute Asia (SFIA).