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Inside the Playbook: How are financial firms supporting clients on transition planning?

22 October 2024 / WORDS BY Pollination

Climate transition plans are a core element of business strategy, setting out an organisation’s ambition, actions and accountability in supporting the shift to a low-carbon, climate-resilient economy. Financial institutions are increasingly using these plans to understand borrowers’ and investees’ transition journeys, to assess associated risks and opportunities, and to inform their long-term strategies.

To contribute to the improvement of transition planning and practice, we surveyed twenty-six members of The Institute of International Finance’s membership, in tandem with conducting structured interviews and a systemic review of transition plan-related materials, to gain insights on financial institution use of borrower and investee transition plans.

In this new report – a collaboration between Pollination and The Institute of International Finance – we explore how financial institutions are using these plans to manage risks and opportunities while aligning their strategies with net-zero goals. This analysis highlights the growing importance of transparency, accountability, and integrating nature and social considerations into transition plans. With evolving regulations and increased expectations for plan quality, the report provides key insights on how to develop robust, regularly updated plans that demonstrate real progress.

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