Climate Transition Plan
ESRS E1-1 requires companies to disclose their transition plan for climate change mitigation. This is one of the most scrutinised disclosures — investors, NGOs and regulators will read it closely. Vague plans will not pass assurance.
ESRS E1-1 requires companies to disclose their transition plan for climate change mitigation. ESRS E1-1 requires disclosure of your company's transition plan for climate change mitigation — the strategy for aligning your business model with a 1.
What ESRS E1-1 requires
ESRS E1-1 requires disclosure of your company's transition plan for climate change mitigation — the strategy for aligning your business model with a 1.5°C pathway and achieving climate neutrality by 2050.
The disclosure must cover: decarbonisation targets and pathways (Scope 1, 2 and 3); key actions and capital allocation for emissions reduction; how the transition plan is embedded in your overall business strategy; identified risks and dependencies; and the financial resources committed to implementation.
The difference between a transition plan and a net zero target
A net zero target is a commitment. A transition plan is the credible, funded pathway to get there. CSRD requires both — the target in E1-4, and the plan in E1-1.
A plan without a credible pathway (specific actions, timelines, capital allocation and governance) will not satisfy ESRS E1-1. Assurers are specifically required to evaluate whether the transition plan is consistent with the company's overall strategy and targets.
Key elements assurers will look for
Scope 3 coverage: Your transition plan must address value chain emissions, not just Scope 1 and 2. This is where most first-time plans fail.
Capital allocation: How much are you investing in the transition? CapEx and OpEx committed to decarbonisation activities must be disclosed.
Interim milestones: 2025, 2030, 2035, 2040 milestones with quantified emissions reductions.
Dependencies and assumptions: What external factors does your plan depend on? Technology availability, policy changes, supplier action?
Governance: Who is responsible for delivering the plan? What are the incentive structures?
Frequently asked questions
Does our transition plan need to be aligned with SBTi?
CSRD does not mandate SBTi alignment, but targets must be compatible with limiting warming to 1.5°C. SBTi validation is increasingly expected by investors and provides a defensible basis for your targets.
What if we do not have a transition plan yet?
You must disclose that. ESRS E1-1 allows disclosure of the absence of a transition plan with an explanation of when one will be developed. However, this is a significant reputational and investor risk.
Can we reference our existing sustainability strategy as our transition plan?
Only if it contains all required ESRS E1-1 elements. Most existing sustainability strategies lack the required specificity on capital allocation, interim milestones and Scope 3 coverage. A gap analysis against E1-1 requirements is essential.