Asset owners and other stakeholders have been invited to provide feedback on draft transition finance guidelines designed to direct capital to the decarbonisation strategies of high-emitting firms.
The new framework, published by the UK’s Transition Finance Council (TFC), aims to identify and evaluate credible transition plans to channel funding to firms across asset classes, jurisdictions and sectors.
The voluntary guidelines are complementary to existing global and domestic standards, and are interoperable with disclosure standards such as those developed by the Transition Plan Taskforce (TPT) and International Sustainability Standards Board (ISSB).
TFC Chair and COP26 President Lord Sharma said the guidelines “will help capital providers to assess transitioning companies – in cement, shipping and transport – in a clear and consistent manner, broadening the reach of transition finance into high-emitting companies”.
According to research provider BloombergNEF, investment in the low-carbon energy transition worldwide grew 11% to US$2.1 trillion in 2024.
The guidelines set out four principles that each address a dimension of transition plan credibility – ambition, progress, accountability, and dependencies – supported by universal and contextual factors.
The TFC said it expected asset owners to use the guidelines to guide capital allocation toward credible entities in high-emitting sectors, to support mandate-setting and investment policies, and to inform the selection or screening of asset managers, to assess the credibility of their transition finance policies.
The consultation will close on 19 September, followed by a second round of feedback in November, before the guidelines are finalised next year.
The TFC was established by the City of London Corporation and the UK government following the recommendations of the Transition Finance Market Review.
