AMF Releases Educational Guide on Corporate Climate Transition Plans Ahead of CSRD Directive Implementation

In anticipation of the first publication of transition plans mandated by the European directive on Corporate Sustainability Reporting (CSRD), the Autorité des marchés financiers (AMF), the French Financial Markets Authority, has published an educational guide. Developed by its Climate and Sustainable Finance Commission (CCFD), the guide delves into the intricacies of companies' climate transition plans, emphasizing the significance of short- and medium-term targets, resource allocation, and governance.

The year 2024 holds particular importance as it marks a crucial period for companies gearing up for the implementation of the CSRD directive. This directive calls for a substantial enhancement in the disclosure of sustainability-related information by companies. Among the focal points are climate transition plans, which play a vital role in integrating long-term objectives into corporate strategy and ensuring their management aligns with short- and medium-term timeframes, reflecting financial planning horizons.

The guide, designed as a user manual for transition plans following the European climate reporting standard, addresses various key aspects:

1. Reporting on Transition Plans:

• The report should offer a comprehensive understanding of the company's transformation efforts.
• Governance involvement, strategic evolution, identification of decarbonization levers, dedicated funding mobilization, and plan monitoring are key elements.

2. Importance of Short- and Medium-Term Targets:

• Given the urgency of achieving the 1.5°C target, the guide stresses the need for ambitious targets by 2030.
• Various methodologies outlined in the guide assist companies in setting and achieving these targets.

3. Presentation of Decarbonization Levers:

• This forms the core of the transition plan, requiring both qualitative and quantitative descriptions of levers.
• An implementation timeline is highlighted as a crucial element.

4. Allocated Resources:

• Credibility of a decarbonization plan hinges on the financial and human resources dedicated to it.

5. Transition Plan Governance and Monitoring:

• Strong board involvement and effective incentive mechanisms are expected by investors.
• The guide emphasizes the scrutiny of transition plan monitoring.

Mathieu Garnero from the Agency for Ecological Transition (ADEME) and Emilie Thiery from L'Oréal, members of both the Climate and Sustainable Finance Commission and the Issuers Commission of the AMF, acted as co-rapporteurs for the working group.

Marie-Anne Barbat-Layani, Chair of the AMF, highlighted that this initiative aligns with the AMF's strategic priority of promoting more sustainable finance. The guide aims to assist companies in complying with ambitious European standards, emphasizing the AMF's commitment to providing support and supervision in sustainable finance initiatives. The publication underlines the necessity for robust corporate strategies in the face of climate change and signals the AMF's dedication to fostering a more sustainable financial landscape.

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