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RIAA strongly supports the Government progressing this commitment from the Government’s Sustainable Finance Roadmap released in June 2024. As stated in the consultation paper, “credible and robust transition plans can support a wide range of potential users who may rely on them to guide investment and lending decisions, and understand economy-wide transition lever sand pathways.”

RIAA has long supported robust and credible transition planning and disclosure of transition plans, including transparency around offsets, target setting and mitigation strategies. These should be consistent with emerging international transition planning requirements and include information on how the entity’s capital expenditure and investment commitments support the transition. This would provide a solid foundation for credible transition planning and target setting and increases transparency, allowing capital markets and investors to make better-informed decisions.

A just energy transition is best supported by integrated thinking, decision-making and reporting due to the wide range of investors and companies involved in the transformation to net zero. In addition, given the substantial intersection between climate/biodiversity and other sustainability issues (including social elements), the transition planning expectations should expand over time to incorporate these issues.

RIAA’s response has been informed by the input of RIAA members and outlines whole-of-government solutions to address the concerns outlined in the discussion paper. RIAA thanks those RIAA members who contributed to the development of this response.

Collaboration with industry

RIAA has been an active participant in the Transition Planning Working Group convened by the Climateworks Centre and the Energy Efficiency Council (EEC). The group brings together a range of representatives across a range of industries with a common purpose to support credible transition plans. We have welcomed the opportunity, through this forum, to engage with Treasury to assist with the next stages of development of the guidance. This Working Group, including RIAA, provided input into the 2025 publication by Climateworks of its Guide to credibility for corporate climate transition plans, drawing on and consolidating 34 global best practice resources.

RIAA supports the submissions of the members of the Transition Planning Working Group.

General recommendations

Clearly distinguish between ‘transition planning’ and ‘transition plans’

The consultation paper states: "Transition planning is the ongoing strategic process for identifying and responding to climate-related risks and opportunities, including setting climate ambitions and targets, and developing implementation approaches with supporting governance and reporting arrangements. Transition plans are an output of the transition planning process in a strategic document which outlines an organisation’s targets, actions and resources for a transition towards a lower-carbon economy." (emphasis added)

However, RIAA considers that the guidance provided does not clearly distinguish between guidance for transition planning and guidance for transition plans. In addition, the objective of the TP Guidance is unclear.

• The title, Climate-related Transition Planning Guidance, indicates that the intention is to provide guidance to support the strategic process of transition planning c.f. the disclosure requirements for the output of the planning process (i.e. transition plans).
• However, much of the TP Guidance focuses on disclosure of transitions plans without sufficient practical, operational guidance provided to the planning process.
• In RIAA’s view, specific guidance (that is more than an introductory overview) on leading practice transition planning from the Government would, at present, be a useful addition to the existing policy and information.

Transition planning documents used internally (i.e. for strategic planning and operational decision-making) may differ significantly inform and detail from externally disclosed plans, which are tailored for transparency, comparability, compliance and stakeholder engagement.

The current draft does not fully capture the dual role of transition planning and transition plans: We recommend the guidance be reviewed to ensure operational guidance for transition planning is delineated from disclosure expectations. For example, references to the IFRS TPT Disclosure Framework should recognise that this is a disclosure framework and explicitly advise on how organisations can bridge internal planning with credible public disclosure.

Provide the regulatory and legal context of the TP Guidance

While the TP Guidance itself is not a legislative instrument, it is closely aligned with the:‍

• AASB S2 Climate-related Disclosures, which requires entities to disclose information about any transition plans they have prepared.‍
• IFRS Transition Plan Taskforce (TPT) Disclosure Framework, which Treasury proposes to endorse as the recommended structure for transition plans.

The guidance is therefore situated within a broader regulatory ecosystem that includes mandatory sustainability reporting, assurance standards, and ASIC oversight.

Recommendations regarding the legal and regulatory premise of the TP Guidance

• Clarify the legal status of the guidance in the final document, including its relationship to AASB S2, ASIC expectations and policy, and the Corporations Act.
• Improve  alignment with AASB S2 by including a table which maps the TP Guidance to relevant AASB S2 requirements and remove duplication through cross-referencing where possible and where it does not impact comprehension.
• Engage ASIC to provide complementary guidance or commentary on how adherence to the Transition Planning Guidance may support compliance with legal obligations for climate-related financial disclosure, forward-looking statements and other sustainability disclosures.

General considerations for transition planning

RIAA refers to submissions made in the RIAA Submission to the Draft Sustainable Finance Strategy December 2023 and sets out the following considerations to ensure transition planning has the best chance of success:

• While commencing on a voluntary basis, maintain a pathway towards mandatory, economy-wide transition planning, including the publication of public transition plans.
• Immediate priority given to industries with heavy scope 1 and 2 footprints, such as extractive industries, heavy manufacturing, chemicals and agriculture; as well as sectors with significant scope 3 emissions such as transport. For sectors with a low footprint, reduced requirements for planning could be imposed;
• Recognise companies which provide solutions to mitigating or adapting to climate change;
• Transition plans should be aligned with the government's sectoral pathways;
• Apply the Strategy's 'do no significant harm' principle through the design of transition plan expectations, avoid 'carbon tunnel vision', and ensure business transition planning is flexible enough to incorporate negative impacts on biodiversity, human health and human rights;
• Align transition planning with the requirements in the ASRS, being a 1.5^oC scenario and a well-below 2^oC scenario;
• Transition plans should recognise the different reporting needs for financial institutions and companies, and the intended audience and use case for the information;
• For superannuation funds, reporting needs to be in members’ best financial interests – for making better investment decisions and assisting members in making informed choices.

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