The Association of Chartered Certified Accountants (ACCA) has urged the UK Government to set practical guidelines for the mandatory climate transition plans for financial institutions and FTSE 100 companies.  

This call to action comes as the government seeks input on how to implement these plans in alignment with the Paris Agreement.  

In a response to the Department for Energy Security and Net Zero’s (DESNZ) consultation, the ACCA highlighted the importance of transition plans that are both “credible” and “forward-looking”, enabling businesses to align with the UK’s climate objectives.  

Such plans are seen as key to driving investment into sectors that are vital for the nation’s future economic stability and competitive edge, while also capitalising on the opportunities arising from the transition to net zero emissions. 

The body recognises the growing pressure on companies to provide clear and detailed disclosures related to their climate transition strategies.  

This information is critical for investors that need to understand the climate-related risks and opportunities associated with their investments in order to make informed decisions. 

However, ACCA cautions against the potential for excessive administrative burdens that could result from new regulations, advocating for a balanced approach where the benefits of compliance are not overshadowed by costs.  

ACCA Strategy and Governance executive director Maggie McGhee said: “ACCA recognises the urgency of addressing the climate emergency and supports the need for swift action. However, transition plan requirements must reflect market realities including current talent and skills shortages, as well as the potential impacts on the UK’s market competitiveness and investment attractiveness. 

“To be effective, these requirements should strike a balance: encouraging meaningful organisational change without imposing disproportionate administrative burdens, particularly where the costs of compliance may outweigh the benefits.” 

ACCA UK Technical Advisory and Strategic Engagement head Glenn Collins stated: “DESNZ should adopt a proportionate approach, particularly in relation to SMEs [small and medium-sized enterprises] and entities in emerging market and developing economies. SMEs play a vital role in the net zero transition but face growing regulatory and reporting pressures. Recognising these differences is important to avoid creating unintended barriers and to promote inclusive participation in the global transition.” 

Prior to this, the ACCA introduced its Virtual Skills platform to support early-career professionals with practical guidance, particularly in job application and interview preparation.