Report: ASEAN Companies Must Be More Transparent on Transition Plans

 

 

Report: ASEAN Companies Must Be More Transparent on Transition Plans

Study of 10 companies’ climate planning finds varying levels of ambition and fragmented reporting, but Climate Bonds hopes to drive progress with report

London 19/01/2022 08:00 GMT+1: Climate Bonds publishes  Scaling Transition Finance, ASEAN: The Transition Plan,  analysing the transition plans of ASEAN based entities to assess the current state of transition planning and provide recommendations for next steps. The entities selected were from a range of hard-to-abate sectors, and where possible, were active in the debt markets. Focus is to provide good guidance to entities in this space to guide the content and scope of transition plans for a credibly transitioning company.

The paper was supported by The Oak Foundation.

The report incorporates an analysis of ten company level transition plans, a checklist to achieve the Five Hallmarks of a Credibly Transitioning Company, and guidance for issuers on sustainability-linked bonds (SLBs) as transition finance instruments.

To reach net-zero greenhouse gas (GHG) emissions by 2050, entities operating in most sectors must undergo a major transformation.  The key tool that will enable this transformation is a robust transition plan that is science-based, coherent, comprehensive, transparent, and covers all material scopes of emissions and business activities.

Key findings

Credible transition plans outline climate ambition and the accompanying business transformation that will support it. Good guidance available to steer the content and scope of transition plans.

  1. Many companies are announcing net zero commitments and efforts are being made to develop transition plans (also called sustainability strategies, climate policies, climate action plans) with key performance indicators (KPIs) and sustainability performance targets (SPTs).
  2. There is scope for improvement as most of the plans included in the report were fragmented with information contained in multiple locations using different indicators meaning the assessment of the ambition levels and impacts of the plans was difficult
  3. Targets are not yet consistently underpinned by the credible, comparable, and costed decarbonisation strategies and changes to business practices which are required.

Recommendations

Most entities must transition their activities towards net zero and should start planning for this as soon as possible. Entities operating in some sectors may not have complete clarity on what precisely needs to be done further down the line but should nevertheless begin with what is currently practicable. Climate Bonds new report makes the following recommendations:

  1. A transition plan should be contained in a single, clearly labelled, easily accessible document
  2. The plan should be dated and include an indication of how frequently it will be evaluated to incorporate ongoing developments.
  3. Labelling and terminology should be applied consistently across the transition plan and related documents
  4. Transition plans should address all Five Hallmarks, and where there are gaps, these should be explained and a clear plan to address these gaps should be included
  5. Any organisation planning to issue and SLB should follow the guidance given in the report to ensure the maximum credibility and impact.

 

Sean Kidney, CEO of Climate Bonds Initiative:

“Many companies in the ASEAN region are operating in traditional hard-to-abate-sectors and must make the most dramatic changes to their business models if they are to survive. The region is one of the most vulnerable to extreme weather but can take comfort that investors are lining up to pump capital into credible corporate plans on climate transition.”

 

<ENDS>

 

 

For more information:

Liam Jones

Communications and Media Officer

Climate Bonds Initiative 

+44 (0)7463 733 900

liam.jones@climatebonds.net

 

Luiza Mello 

Communications Advisor for Asia Pacific and China

Climate Bonds Initiative 

+55 (61) 98209 8126 

luiza.mello@climatebonds.net 

 

Notes for Journalists:

About the Climate Bonds Initiative: The Climate Bonds Initiative is an investor-focused not-for-profit, promoting large-scale investment for climate action. Climate Bonds undertakes advocacy and outreach to inform and stimulate the market, provides policy models and government advice, market data and analysis, and administers an international Standard & Certification Scheme for best practice in green bonds issuance. More information on our website here.

 

-------------------------------------------------------------------

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser. Any reference to a financial organisation or debt instrument or investment product is for information purposes only. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.

The Climate Bonds Initiative is not endorsing, recommending or advising on the financial merits or otherwise of any debt instrument or investment product and no information within this communication should be taken as such, nor should any information in this communication be relied upon in making any investment decision.

Certification under the Climate Bond Standard only reflects the climate attributes of the use of proceeds of a designated debt instrument. It does not reflect the credit worthiness of the designated debt instrument, nor its compliance with national or international laws.
A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment an individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole or in part on any information contained within this, or any other Climate Bonds Initiative public communication.