On 18 August 2025, the Transition Finance Council issued a consultation on draft entity-level Transition Finance Guidelines (the draft Guidelines), which aim to address the current absence of a consistent framework capable of application across asset classes for identifying and evaluating credible transition finance at entity-level.
Background
The draft Guidelines would be voluntary and are designed to complement existing frameworks such as those developed by the Transition Plan Taskforce and the Internation Sustainability Standards Board. The existing frameworks help companies to communicate their transition plans, whereas the draft Guidelines build on this with a focus of how to assess the credibility of an entity’s ambition, and near-term transition planning and progress.
Guidelines
The draft Guidelines are divided into four Principles in relation to assessing the credibility of transition finance:
- Credible Ambition – sets interim targets to reduce emissions and having metrics and actions to achieve them.
- Action into Progress – sets out how it can progress implementation actions with the purpose of meeting any interim targets and metrics it has set.
- Transparent Accountability – entities will integrate their implementation actions and interim targets and metrics into its business planning, organisational processes, and governance.
- Addressing dependencies – the entity will analyse and consider any material dependencies in determining its implementation actions and interim targets and metrics; managing these in relation to which it has leverage, by prioritising the most material.
These principles are then intended to be supported by Universal Factors containing practical criteria which are evidence points for assessing whether the principles have been satisfied.
Next steps
The consultation will close at 12pm on 19 September 2025. The Transition Finance Council intends to release a second consultation later in 2025, with final Guidelines being issued in 2026.