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OECD Guidance on Transition Finance

Ensuring Credibility of Corporate Climate Transition Plans

image of OECD Guidance on Transition Finance

This guidance sets out elements of credible corporate climate transition plans, which aim to align with the temperature goal of the Paris Agreement. Such plans are needed to address the growing risk of greenwashing in transition finance and facilitate a global, whole-of-economy climate transition. Based on extensive stakeholder consultations, including an industry survey, the guidance provides market actors, policy makers, and regulators with a comprehensive overview of existing transition finance approaches, identifying the main challenges and solutions. The guidance is relevant to: (i) policy-makers and regulators seeking to develop or revise relevant policy frameworks or regulations; (ii) corporates developing transition plans and seeking to identify the most salient elements of existing initiatives; and (iii) financial market participants planning to provide finance for the implementation of net-zero strategies. The guidance emphasises greater transparency, comparability and granularity in corporate transition plans, and the need for adequate environmental and social safeguards. In light of challenges for some corporates, especially in emerging markets and developing economies, and the risk of excluding key actors from transition finance, the guidance highlights the need for policy-makers to take stronger action to bolster domestic enabling environments for transformative investments.

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Methodology of the 2022 OECD Industry Survey on Transition Finance

The OECD created an industry survey to collect views on the topic of transition finance of different stakeholders, including financial institutions, non-financial corporates, academia, data and service providers, public finance institutions (such as central banks and development banks), and non‑governmental organisations and other relevant actors. The purpose of the survey was to gather insights on the perceived barriers and enabling factors to accessing transition finance, the most important elements to a credible corporate transition plan, as well as the market’s perspective on current developments.

English

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