Written by Jacques Morris, Head of the International Transition Plan Network (ITPN) and Programme Leader, E3G
Transition plans have been discussed at COPs for several years, to date mainly by market actors. This year, however, saw a change: they became part of official sector dialogues.
Transition plans are important to governments, as well as markets
At COP30, the Baku to Belem Roadmap set out a pathway to achieve the COP29 climate finance goal to channel $1.3 trillion per year into developing countries by 2035. The Roadmap firmly recognised the value of transition plans, noting them as “critical underpinnings for sound financial investment allocation and risk assessments”. The document encouraged regulators to adopt International Sustainability Standards Board (ISSB) standards and define expectations for transition plans.
Feeding into COP30 in Belém, the Sharm-el-Sheikh Dialogue considered private sector transition plans as a means of supporting Article 2.1c of the Paris Agreement, which calls on governments to “make financial flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development”.
As part of the COP30 outcome, the Sharm-el-Sheikh Dialogue will be replaced with the Veredas Dialogue on the implementation of Article 2.1c, supported by the Xingu Finance Talks. Given the focus of the Dialogue and Talks on implementation, there is now an opportunity for Parties to discuss how they can support private sector transition planning, for example through standards alignment, capacity building, and the implementation of transition plans.
Finally, the COP30 Action Agenda – which was also a key part the Belém outcome – featured a group of non-state actors working on transition plans for financial institutions. ITPN was part of this effort and will work with others to continue building global coordination.
Transitions plans offer a compass for capital
Increased interest from policymakers is partly a reaction to growing market norms, where the relationship between transition plans and transition finance is strengthening. Financial institutions are increasingly using transition plans to manage risk and allocate capital.
Our new report outlines five ways that plans can support financing, featuring real-world case studies. We set out how transition plans can expand the universe of sustainability investments beyond activities that are green or near green, into the sectors where finance is most needed.
New guidance supports this shift, such as the UK Transition Finance Council’s draft guidelines and the new Transition Loans guidance.
Transition plans support and interact with policy
2025 saw headwinds and tailwinds for national treatment of transition plans:
- A new ITPN map tracks global requirements, showing that 37 jurisdictions are putting in place rules based on the ISSB standards. It also shows that disclosure will be mandatory in over half of the G20 in the next three years, with Asia-Pacific a fast-growing region for transition planning.
- In the EU, the omnibus process has concluded, with transition plan disclosures remaining part of the Corporate Sustainability Reporting Directive (CSRD) but removed from the Corporate Sustainability Due Diligence Directive (CSDDD).
- On 19 December, China released a draft corporate sustainability disclosure standard which includes transition plan disclosure.
- In 2025, we also saw national consultations from the UK, Australia, UAE and others on transition plan-specific rules.
In this new context, a key discussion at business events in São Paulo before COP, and then at negotiations in Belém, was: what is the link between plans and policy?
One emerging part of the answer may be sector transition plans, which can act as a bridge between firm-level transition plans and national policy. Jurisdictions including the EU, Japan and Australia have already published sector transition plans. These plans can help governments to communicate policy direction, companies to plan in line with local pathways, and investors to assess plans against local context.
In addition, one transition plan can have many uses: as well as enabling companies to align with national policy goals, the wealth of information being disclosed means that governments are starting to use transition plans to support policymaking and public finance. The ITPN will be developing work on this in 2026.
Transition plans are part of a wider infrastructure of transition policy
In 2026 we will see more integration of transition plans with transition finance, taxonomies, sectoral plans, climate policy and Nationally Determined Contributions (NDCs). We are also likely to see further work on how adaptation and nature are a core part of transition planning – already a key theme in 2025. All of these developments will support conversations in the lead up to COP31 on tools to mobilise finance, especially under the Veredas Dialogue.
Sign up to our webinar on 22 January to hear from global experts on what to expect this year.
Stay tuned – this is a rapidly evolving space. The table below is a list of key resources published in October & November 2025 alone.