Climate Transition Plans
Helping Canadian companies unlock competitiveness and capital
When it comes to demonstrating their climate readiness, Canadian companies are on their heels while global companies charge ahead. This is a competitiveness risk. As investors scrutinize climate risk with increased sophistication, companies need to know what it takes to pass the test for global capital.
Business Future Pathways is creating clear, pragmatic, sector-specific guidance to help companies operationalize and communicate climate transition plans that increase investor confidence and open doors for long-term investment. Our goal is to develop transition plan guidance that applies to the entire market, as well as guidance tailored specifically to priority sectors by 2027.
Transition Plan News and Updates
What is a Transition Plan?
Corporate climate transition plans are a strategic tool that can help businesses prepare for climate disruption and make the pivots required to stay profitable and competitive. They identify the most important risks and opportunities facing a business and give it a clear path for integrating this information directly into its business strategy and financial planning.
Read more
The European Union, China, Australia, the United Kingdom, and many more of Canada’s trading partners are creating standards for transition plans and, in some cases, requiring them. This will shape international markets and value chains in which many Canadian companies compete.
How Transition Planning Helps Companies Compete
Running a profitable and competitive business in an era of climate disruption means proactively managing transition-related risks and seizing emerging opportunities. And it means understanding and mitigating physical climate impacts and making assets, operations, and supply chains more resilient.
Read more
Transition plans improve internal understanding of these risks and opportunities and enhance organizational capacity to address them proactively. They also strengthen relationships with investors and stakeholders, enhancing trust and credibility while showing where and how investments can be directed to support long-term business objectives.
The Value of Made-in-Canada Transition Planning Guidance
Between our country’s emissions-intensive economy, an alphabet soup of evolving standards, escalating climate-related risks, and increased policy and market uncertainty, most Canadian companies are struggling with where to start in their climate readiness journeys.
Read more
With tailored and sector-specific guidance in hand, companies can prove that long-term investments in Canada are smart and profitable. It will help our businesses forge even stronger connections with investors and markets in the EU, UK, and across the globe—opening doors for investment. This is how we build the thriving and resilient economy Canadians need.
“Climate risk is business risk. Canadian companies that embed climate transition planning into their strategy today will be better positioned to compete, innovate, and thrive in tomorrow’s economy.”
Gildas Poissonnier
Desjardins Group
Major global players are ahead of Canada on Transition Planning
Percent of companies disclosing key elements of credible transition plans:
Global average
10%
Japan
23%
United Kingdom
12%
Australia
11%
United States
6%
Canada
5%
FAQ
What’s the difference between transition planning and sustainability reporting?
- While a company’s sustainability report usually looks backwards at its performance, a transition plan looks forwards. It explains how a company plans to get from where it is today to a future state through integrated actions across the company—where its climate risks are lower and its business opportunities are greater.
Is transition planning mandatory?
No, transition plans are currently not mandatory for most companies in Canada.
Federally-regulated financial institutions will have to report on transition plans as part of their climate risk disclosure requirements in the years ahead.
Further, transition plans will directly support the growing number of companies working to align their sustainability reporting with CSSB guidelines.
What basic questions should a transition plan address?
While transition plans will differ, based on the size of a company and its level of exposure to the climate transition, there are some key elements that credible transition plans should cover.
This includes an explanation of the company’s transition goals specifically as they relate the material risks and opportunities that the climate transition and physical climate impacts pose for the business. The plan should describe the actions the company will take to achieve these goals, including the required capital and operational investments it will need to make over time, as well as any strategic shifts it may need to make in its supply chain or business model. Finally, the plan should speak to how progress will be tracked and measured and who will be accountable.
How are the sector guidelines for transition planning being developed?
- The transition guidelines will ultimately be approved by the independent Canadian Taxonomy and Transition Planning Council. Their decisions will be based on recommendations from the Research Team, which will include input from the Financial Sector and Technical Advisory Groups, as well as feedback from public consultations.