Design Climate Transition Plans – An Overview

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    WBCSD Climate Transition Roadmaps Masterclass SeriesWBCSD Climate Transition Roadmaps Masterclass Series


Actionable climate transition planning must be integrated into broader corporate strategy and backed by robust roadmaps that are underpinned by value creation.

Key resources


In late March 2024, WBCSD and BCG conducted a masterclass on the topic of Designing Climate Transition Roadmaps as part of a series of masterclasses. This document summarizes the key learnings that were presented and surfaced via rich discussion among company participants under Chatham House rules. 

Disclosures and reporting requirements are essential drivers for transparency and accountability and can push companies to critically evaluate their climate impact. ~23,000 (1) companies (representing more than half the global market cap) have voluntarily disclosed their emissions to CDP. Disclosures do not, however, guarantee tangible organizational change and cannot automatically catalyze or sustain climate action.  

In terms of ambition, organizations are setting climate targets and planning to further reduce their emissions. But while more than 10,000 (2) companies have publicly announced climate goals, many have not been independently verified. Setting science-based emissions reduction targets that are validated by a reputable third party, such as the Science Based Targets Initiative (SBTi) or equivalent, is an essential foundational step towards meaningful action and credible impact. At the time of writing, ~5,000 (3) companies have SBTi-validated emissions reduction targets and plans for how they’ll reach those goals.

Many SBTi-validated companies are indeed taking action to reach their emission reduction targets. A 2021 SBTi report stated that the companies they have validated typically reduce their emissions by an average of 8.8% (4) per annum, which is significantly above the average 4.2% annual reduction required for alignment with 1.5ºC. However, these organizations are the exception; only ~20% (5) of companies reporting to CDP are on track to meet their emissions reduction goals.  

Ultimately, achieving a successful climate transformation requires a combination of:  

  • Accountability: Standardized measurement driven by reporting regulations or voluntary disclosures 

  • Ambition: Near-term and long-term goals, embedded into the organization’s broader strategic vision and plan 

  • Action: Actual emissions reductions via actions executed across the organization and the supply chain 


When done effectively, climate transition planning processes enable organizations to understand the effect of climate-related risks and opportunities on their own strategy as well as the environment, set goals and objectives regarding their greenhouse gas impact, translate those objectives into implementation pathways for action, and drive tangible progress towards emissions reductions.  

The U.K.’s Transition Plan Taskforce’s planning cycle (6) is increasingly seen as a leading guide for undertaking such planning. The four main stages of transition planning are captured in the figure below.

Figure 1: Transition Plan Taskforce Planning Cycle 

A climate transition roadmap, while closely related to climate transition planning, is a document that codifies the intended actions, along with details such as resourcing and timeline. Such a roadmap is valuable to share with both internal and external stakeholders to communicate ambitions, galvanize actions, and ensure durable accountability.  

As companies undertake their transition planning efforts, they should strive to: 

Disclose, but go beyond disclosure 

Disclosing emissions compels companies to critically evaluate their emissions, assess their environmental impact, and – by helping organizations identify climate risks and/or value creation opportunities and pivot appropriately – prepare them for changes that will set the business up to succeed with sustainability at the core.  

In this vein, the global disclosure landscape is rapidly evolving towards double materiality standards which address the impact that climate and sustainability trends have on the financials of an organization (inward impact), as well as the organization’s impact on the planet and society (outward impact) and stakeholder perception of the same.  

Adapt to the evolving ESG landscape 

Other trends across the ESG landscape are worth considering, while developing transition plans, in order to avoid exposure to unexpected risks and secure continued success. Relevant trends include heightened greenwashing scrutiny and increased enforcement, rising ESG litigation, and backlash from volatile political environments. Evolving levels of climate maturity across the value chain will also need to be kept abreast of.  

Identify and pursue opportunities for value creation 

Value creation should be a central pillar for climate transition as it can help align sustainability efforts with broader organizational priorities, thereby galvanizing action and enabling large-scale climate transformation. Climate and sustainability action is more significant and timelier when not thought of as an “add-on,” but rather a “value-add.” 

Sources of value include (but are not limited to): higher employee attractiveness, reduced costs, increased revenues, better financing access, and higher market valuation. Companies can capture maximum value by acting early. [See “Impact” for examples of value creation opportunities] 

Build a robust roadmap 

Roadmaps are essential as they translate climate ambition into pathways for action, facilitate the coordination of multiple, related climate efforts, and communicate intended actions. 

Thorough and effective roadmaps outline the details of how action will be taken including financial implications, anticipated timelines, roles and responsibilities, inter-dependencies, expected impacts, and metrics for success. Such roadmaps are granular and address all key changes to business operations that will be required in the short-, medium- and long-terms. 

Act on “no-regrets” moves in the near-term 

The climate transformation for any organization will undoubtedly be a long-term effort, and even the planning may be drawn out. While uncertainty exists in the long term, there are several “no-regrets” moves that organizations can make right away. These include actions that lay the right foundation for taking climate action, including: conducting a "health check" to assess climate-related capabilities; establishing cross-departmental coordination; upgrading data tools; integrating climate risk and value creation opportunities into corporate strategy; and keeping track of emerging policies. They may also include certain actions that will almost certainly be needed given the overwhelming macro trends (e.g., investing in renewable electricity, and working with farmers on sustainable agricultural practices).  


Several companies are designing and implementing robust transition plans, principally driven by value creation. Aviva and EDP are two successful examples.  

EDP is a utilities company based out of Lisbon, Portugal, with operations in Europe, North America, South America, and Asia-Pacific.  

In 2022, EDP published its Climate Transition Plan which highlights their strategic goals for decarbonization and alignment with 1.5°C – including achieving Net Zero by 2040. Their Transition Plan sits within the broader context of their 2022 Sustainability Strategy as well as their ESG Masterplan. Moreover, EDP has built its climate strategy into its organization-wide 2023-2026 Business Plan to ensure integration and execution. EDP’s Climate Transition Plan received the ESG Investing Award for “Best Climate Report” (7).  

As part of their transition, EDP has set short- and long-term science-based targets in addition to defining a Net Zero Action Plan that outlines how they will reach these goals. They have aligned with the Task Force of Climate-related Financial Disclosures (TCFD), adjusted their governance model, integrated climate risk/opportunity management into their strategy, and established climate related KPIs. 

To support decarbonization efforts, EDP launched a Net Zero Acceleration Taskforce to assess challenges, identify optimal decarbonization levers, engage with supply chain/partners/global community, and drive transformation.  

You can read EDP’s full Climate Transition Plan here

Aviva is one of the UK's leading Insurance, Wealth and Retirement businesses serving customers in the UK, Ireland, and Canada. 

In 2021, Aviva released its first Climate Transition Plan, outlining the pathway to achieving its climate ambitions, including reaching Net Zero operations and supply chain and reducing carbon intensity of its assets by 60 percent by 2030, as well as achieving Net Zero carbon investments by 2040. 

The Climate Transition Plan covers all material areas of their business (investments, insurance underwriting/claims management, and internal/supply chain operations) and aims to steer their entire business model towards a trajectory that aligns with the latest climate science recommendations. It outlines baselining, target setting, and action plans across the 5 key segments mentioned above, and a roadmap tying these approaches together. 

Aviva’s plan is based on the principle that interim targets are crucial to ensuring that immediate action is taken to frontload emission reduction as far as possible. As such, they have set near-term science-based targets that have been approved by SBTi, and are committed to setting long-term targets aligned with 1.5°C.  

You can read Aviva’s full Climate Transition Plan here


Climate impact

Targeted emissions sources
  • Scopes 1, 2 and 3: Comprehensive climate transition plans address emissions from operations in addition to indirect emissions from the value chain 

Decarbonization impact 

  • The decarbonization impact of an organization’s climate transition will vary significantly by footprint, sector, and geography  

Business impact

  • Opportunities for value creation, including (but not limited to): 

    • Higher employee attractiveness: A survey by Accenture found that 40% of millennials have used ESG performance as a factor when deciding between job offers (8)

    • Reducing costs while reducing carbon footprint: Approximately 50% of emissions reductions, on average, can be reached at net zero cost in key sectors (9)

    • Driving revenues: Sustainable products are a growing share of the market; between 2016 and 2021, sustainable consumer products experienced a CAGR 2.5x larger than conventional products (10)

    • Better financing access (as well as lower cost of capital): Green, Social, Sustainability & Sustainability-linked Bonds (GSSSBs) experienced more than 4x growth between 2018 and 2023 (11) [See “Raise capital for climate investment through green bonds” in the Climate Drive Action Library] 

    • Higher market valuation: Companies performing well on material ESG factors see up to 6% annualized share price increase over expected rate of return (12) 

[See “Read More” for examples of companies that have successfully created value through climate transition efforts] 

  • Reduced risk 

    • Minimizing potential adverse impacts from climate-related policy and legal changes that limit actions with adverse climate impacts (or conversely preparing an organization to benefit from actions that enhance mitigation, adaption and resilience, and enforce disclosure) 

    • Being more resilient to technology evolution that displaces existing approaches (e.g., rapid move to electric vehicles) 

    • Preparing for changes to markets including fluctuations in supply and demand of lower-carbon commodities, products and services 

    • Preserving or enhancing reputation by making moves towards a lower-carbon economy, in line with growing market- and consumer-demand 


  • Investment  

    • Upfront investment may be required for implementing climate transition plans as several actions could require the development/deployment of new equipment and infrastructure  

  • Operating costs 

    • Many decarbonization efforts yield net savings as illustrated by the fact that approximately 50% of emissions reductions, on average, can be reached at net zero cost in key sectors 

    • At the same time, there may be a near-term increase in certain operating costs in the form of new processes and upskilling for required capabilities of the existing workforce; many companies, however, believe that over time these costs can be absorbed into existing budgets as they would become “normalized” 


Key Stakeholders

Thorough climate transition planning requires the engagement and involvement of stakeholders across the organization and its value chain in order to establish effective governance, awareness, ownership, and execution. The Central Sustainability team can work closely with and facilitate engagement with the following stakeholders (illustrative list):  

Internal stakeholders: 

  • Board level: Secure buy-in and align climate transition priorities with broader organizational mission and vision  

  • Executives: Establish responsibilities and ownership of climate transition efforts at executive level, and establish conducive governance structures 

  • Business units: Embed transition action plan and associated initiatives into various functions, divisions and business units and clearly define roles and responsibilities  

  • Strategy and Finance: Integrate climate transition efforts into strategic and financial planning  

  • Procurement: Ensure appropriate goods and services required for executing climate transition efforts are acquired 

 External stakeholders  

  • Investors: Align with investors to understand how transition plans will impact need for and access to capital 

  • Suppliers: Assess the ability of and develop plans for engaging suppliers to meet requirements stemming from the organization’s climate transition 

  • Customers: Evaluate the impact on customers (including usage and perception changes) from ongoing or potential product/service changes 

  • Public sector: Engage with government regulators, policy makers, etc., to align climate transition efforts with wider societal goals   

Implementation tips  

As organizations build their climate transition plans and associated roadmaps, the following suggestions may be considered:  

When (Re-)Assessing 

  • Focus on materiality as a means for generating buy-in 

    • Quantify sustainability and business impact from proposed climate-related actions (or inaction) to identify where change is needed and possible; business units and functions tend to be more willing to address issues that have more immediate and/or material impact  

  • Ensure that the whole organization is involved from the outset 

    • Ensure both top-down and bottom-up accountability (including top-down commitments, strong governance structures, cross-functional teams, and clear roles and responsibilities across the organization)  [This will be covered in greater depth in the fifth masterclass of this series] 

When Setting Strategic Ambition 

  • Integrate sustainability into business planning 

    • Don’t silo sustainability, but instead ensure the climate transition is an organization-wide priority. Climate transition planning provides an opportunity to include a range of business units / functions in climate action and generate buy-in. Ultimately, there should only be “one business strategy,” in which climate considerations are amply accommodated.  

 When Planning Actions 

  • Ensure climate plans are coherent and internally aligned 

    • Synchronize sustainability planning with existing business planning cycles  

    • Build sustainability metrics into corporate KPIs 

  • Speak the language of business as well as sustainability 

    • Make the case by communicating required resources (funding, FTEs), business value, and cost of inaction, in addition to environmental impact 

    • Consider leveraging internal carbon pricing as a tool to inform decision-making by bridging the gap between business impact and climate impact 

  • Account for localized contexts while advancing over-arching climate ambitions 

    • Tailor plans to fit the local context of specific geographies in order to align climate action with the cultural context, resource availability and level of infrastructure development  

    • Be comfortable with having certain regions/business units going further faster, and having others follow  

  • Prioritize achievable initiatives given current capabilities and available resources, while continuing to work on building the capabilities necessary for more challenging efforts 

    • Not all solutions will be viable right away, and allowing time for maturation may be necessary   

  • Build flexible plans, accounting for inherent uncertainty 

    • Pilots can and should be deployed strategically to test waters as helpful or necessary  

  • Make sure your plans are credible 

    • Effective climate transition plans are ambitious yet actionable; time-bound with specific interim targets; quantifiable with measurable impacts and clear metrics and KPIs 

    • Especially, with the risk of perceived “greenwashing” there is a need to responsibly ensure credibility, and communicate appropriately 

    • Investors value transparency, and funding tends to flow to entities that are transparent (about successes and shortcomings), develop thoughtful strategies, and back them up with robust action plans

When (Re-)Implementing Plans 

  • Stay agile 

    • Keep track of progress in order to celebrate achievements while acknowledging, and addressing, shortfalls 

    • Lean into the reality that climate transition will be a work in progress for some time to come 

  • Acknowledge capability gaps and form partnerships to address them 

    • Companies will need support from other players, and partnering with the ecosystem can help achieve climate results in the long-term. As such, acknowledging where companies are unable to act adequately on their own can be a powerful catalyst towards forming such partnerships.  [See “Building partnerships through alliances and co-investments” for more information] 

  • Revisit regularly 

    • Update climate transition plans regularly (e.g., every three years) to account for evolving technology, markets, policies, and industry maturity  

  • Leverage emerging technologies, such as machine learning and AI, to disclose efficiently and accurately 

  • Align with TCFD framework when disclosing progress 

    • While various frameworks, protocols and standards for disclosure exist, they are beginning to converge toward the principles laid out by the Task Force on Climate-Related Financial Disclosure 

Read more

Examples of companies that have successfully created value through climate transition efforts [first mentioned in “Solution” and “Business Impact”]: 

  • Unilever (cost savings, ~€800M) 

    • Achieved ~€800 million in savings by sourcing low-cost renewable electricity (13)

  • ELYSIS (cost savings, 15% OpEx) 

    • First commercial quality aluminum produced at industrial scale without greenhouse gas emissions 

    • Yields 15% OpEx savings and 15% productivity increases (14) 

  • Novamont (driving revenues, 71% of revenue from circular products) 

    • Chemicals company founded in 1989 with sustainability at its core 

    • Revenues more than doubled between 2015 and 2022 and regenerative/circular products accounted for 71% of its > €400M revenue (15)

  • Apple (financing access, ~$4.7B green bonds) 

    • Issued ~ $4.7 billion (16) in green bonds to accelerate progress towards a carbon neutral supply chain by 2030 

    • As of 2022, 59 projects are mitigating/offsetting ~13M metric tons of CO2e through the deployment of ~ 700 megawatts of renewable energy capacity, promoting recycling and enabling new research and development  

  • Ørsted, and a few other energy sector climate leaders (higher valuation, 30% higher shareholder returns from 2017 – 2020) 

    • Ørsted (an early mover in the wind power space) experienced stock prices 17x higher than the peer average in 2021 (17)

    • In early 2021 energy sector climate leaders (including Enel, Iberdrola, Neste, NextEra Energy and Ørsted) generated annual total shareholder returns of the order of 30% from 2017 to 2020 (similar to that of tech firms such as Amazon, Apple, Facebook and Google) (18).

Resources to consider as you design your plan  

As one example reference resource, Transform to Net Zero’s Transformation Guide for Climate Transition Action Plans outlines 11 key elements of model climate transition action plans, which include roadmaps for low carbon and other climate-related initiatives. 

Several leading organizations include transition action plans/roadmaps within their climate transition plans, including (but not limited to):  

Reclaim Finance’s Corporate Climate Transition Plans: What to Look For report outlines criteria for robust transition plans as well as red flag indicators for ill-designed or incomplete plans.