Creating a climate transition plan is a challenging task. However, implementing it in a step-by-step manner makes it more manageable. Our plan of action for our clients is aligned with the CSRD and consists of the following steps:

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1. ‍Footprint: Before you can think about reduction measures as a company, you need to know the quantities of greenhouse gases (GHGs) you emit. That calculation includes the total footprint, accounting for your direct (scope 1) and indirect (scope 2 and 3) emissions. Be sure to choose a representative base year to determine your footprint, as all subsequent steps are grafted onto this baseline measurement.‍
2. Target-setting: Based on your footprint, you will set emission reduction targets for 2030 and 2050, as well as five-year interim targets. Your GHG targets cover your entire footprint, including scope 3 emissions that take place in the upstream and downstream value chain, which in most cases make up the overwhelming majority of your footprint. Consider science-based targets (taken from the SBTi) and set credible interim targets.‍
3. Decarbonization plan: To achieve your GHG targets, you will establish a roadmap with concrete measures and leverage projects. We also call this the ‘waterfall chart’. Measures and projects include investments in renewable energy, electrification or GHG reduction measures through supply chain management (for scope 3 emissions). It is also important that you remember to take expected business growth into account, as this will give rise to additional emissions.‍
4. Integration into the business strategy and business model: The climate transition plan focuses on concrete actions. You can only achieve your GHG reduction targets if they are embedded in the whole organization and business strategy. All strategic decisions on investments, innovations, acquisitions, etc. must be in line with emission reduction targets. To this end, the following assessments are needed:‍
   1. Climate resilience-analysis: this analysis builds on your double materiality analysis, but adds climate scenarios to identify more deeply and precisely the physical and transition risks to your business. You then determine the strategy and business model’s resilience to those risks.
   2. Assessment of locked-in emissions: this assessment considers whether and how locked-in emissions (see box) could jeopardize your reduction targets and cause a transition risk. If so, consider what plans are in place to manage GHG- and energy-intensive assets and products.
   3. ‍Stakeholder mapping: this exercise maps out which stakeholders contribute significantly to your scope 3 emissions. Establish an action plan to inform and engage them as part of your climate targets.‍
5. Investments and financing: Prepare a CapEx and OpEx plan regarding your climate-related investments and financing. If your economic activities fall under the EU Taxonomy, explain which objectives or plans (CapEx and OpEx) will align your activities with the EU Taxonomy.‍
6. Validation, audit and monitoring: The governing, managerial and supervisory bodies will approve the climate transition plan. That buy-in and validation are crucial to fully grasping climate-related risks and opportunities. Moreover, CO2 reduction targets and the transition plan form part of your ESG audit. Finally, an annual commentary should clarify how the implementation of the transition plan is progressing. This includes annual measurement and reporting of the carbon footprint.

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