DELOITTE DIVE IN: Transition plans. Episode 1: The Whats and Whys
This is the first post of Deloitte’s Dive in article series in which we introduce and discuss companies’ transition plans towards a low-carbon economy. Here, we focus on defining what is a transition plan and why is it relevant. Upcoming posts will explore different facets of the transition plan, from its credibility to its resilience. Stay tuned for the next episodes over the coming weeks.
What is a transition plan?
A transition plan outlines the steps a company will take to reduce its greenhouse gas (GHG) emissions and adapt to the impacts of climate change. It typically includes clear targets, timelines, and actions aligned with broader climate goals such as the Paris Agreement and net zero commitments.
“Transition plans can help organizations to anticipate physical risks like extreme weather and transition risks, such as policy or technology changes, protecting operations and supply chains.”
When designed thoughtfully, they also enable businesses to capitalise on growth opportunities in low-carbon markets.
Why is it important?
In today’s fast-paced business environment, climate change is a pressing regulatory and strategic reality. Companies across Europe are facing increasing expectations by the civil society and regulators to disclose their transition methods towards a low-carbon economy.
Many climate targets are absolute, meaning that any delay in progress would lead to more emissions to be cut during the following years. As the 2030 deadline for many climate targets—such as the ones aligning with the Science Based Target initiative— approaches and the learning curve flattens, many companies find it increasingly challenging to maintain steady progress.
Moreover, regulatory frameworks such as the CSRD and the IFRS require companies to provide credible, detailed information about climate-related impacts, risks, opportunities, and transition strategies. Here is where transition plans become a central part of corporate reporting, as they demonstrate a company’s accountability and long-term resilience.
“By providing a clear roadmap for reducing emissions and adapting operations to regulations and market demands, transition plans help companies achieve incremental success.”
At the same time, they build trust with investors and enhance access to capital by increasing transparency around a company’s processes. The credibility of emission reduction targets and climate transition plans is also a vital element of company's reputation as a sustainable business operator.
Effects of the regulatory landscape on transition plans
Regulatory frameworks are shaping transition plans with stringent demands in terms of data disclosure and the integration of processes with strategy. Under the CSRD, many companies must provide detailed information on their transition plans, such as reduction targets, climate change mitigation actions, and locked-in GHG emissions, among others. The EFRAG is creating guidance on how to implement and report transition plans. This will help users of these reports get clearer and more detailed information about the transition plans and how they are included in the company’s governance, strategy, and financial planning.
Additionally, in June 2025 the IFRS Foundation published a new guidance document titled Disclosing information about an entity’s climate-related transition, including information about transition plans, in accordance with IFRS S2 providing guidance to companies regarding the information to disclose related to the transition plan, and support companies to enhance their existing disclosure.
The situation in the current Finnish market
Recently, Deloitte Finland conducted a benchmarking study of CSRD reports from 2024, covering a sample of large Finnish listed entities (CSRD reporting benchmark study 2025 | Deloitte Finland). Our objective was to observe how the new reporting standards have been taken to use by the first wave of adopters in Finland and to identify differences, trends, and similarities across the reports.
Of the 22 companies analysed, 21 either have a climate transition plan or aims to develop one. Most of the sample have set targets validated by the Science Based Target initiative. All companies reported that either their transition plan or related targets had been approved or reviewed by the CEO, management team or the Board of Directors.
While there is room to improve the overall quality of the transition plan, the results evidence a general acknowledgement that transition plans offer value to companies, at least in terms of transparency.
Conclusion
Navigating the complexities of the climate transition can be challenging, but a well-crafted transition plan can be an excellent steering wheel. By integrating this plan into your business strategy and sharing it transparently, you gain a powerful tool to meet your target, identify risks and opportunities, and build trust with your stakeholders. A valuable instrument to make an impact that matters.
This concludes the first episode of our Dive in series. In the next episode, we will explore credibility of your transition plan.
