Speakers
Objectives
Corporates must disclose plans to align their business models with a sustainable economy and the goal of limiting global warming to 1.5°C. Data users seek details on undertakings’ physical and transition risks, their resilience to different climate scenarios, and their contributions to climate neutrality by 2050. However, creating forward-looking information poses challenges due to dependency on sectoral choices, policies, and citizen behaviours. Transition paths toward a sustainable economy are general, theoretical, and volatile, necessitating coordination. Standardising transition plan parameters and methodologies is crucial to combat greenwashing.
Private initiatives propose common approaches, while regulators are urged to establish standards for consistency and reliability. Yet financial regulators lack a mandate to promote the transition to a low-carbon economy, focusing primarily on financial risk management. Agreeing on common sustainability objectives within an economic sector may also be perceived as reducing competition, imposing additional costs, and favouring larger corporations, potentially limiting competition from smaller firms. Asset managers adding sustainability objectives may face suspicion of deviating from their primary fiduciary duty.
The session aims to clarify objectives and needs addressed by the provision of climate-related transition plans by financial institutions and establish conditions for building reliable and credible plans.
Points of discussion
- What are the main objectives and needs addressed by the definition and provision of climate related transition plans by financial institutions?
- Conditions for building reliable and credible transition plans?