Climate Transition Plan (CTP)

A Climate Transition Plan (CTP) is a strategic document that describes a company's goals and measures to reduce greenhouse gas emissions to net zero by 2050 at the latest. It ensures that the corporate strategy is compatible with global climate targets, such as the Paris Climate Agreement, and helps to limit global warming to a maximum of 1.5°C.

According to ESRS E1, the CTP must include a statement of emission reduction targets and associated measures. In particular, companies must demonstrate how their reduction targets are consistent with limiting global warming to 1.5°C in line with the Paris Agreement. Companies must also explain their decarbonization methods, such as the use of new technologies or changes to their product portfolio. In addition, investments and financing that support the implementation of the plan are described.

Companies that fall under the CSRD reporting obligation must present a credible climate strategy and, if applicable, a CTP in their ESG reporting. Financial institutions and listed companies are often additionally required by the TCFD and SFDR requirements to prepare a transition plan. Many large companies also require a CTP from their suppliers to reduce their Scope 3 emissions.

Companies can receive up to 60% funding through the federal funding for energy and resource efficiency in the economy. This supports the development and implementation of climate protection strategies.

If a company does not submit a CTP, it must explain why it does not have a plan and when it intends to develop one. Such a plan is required for ESRS-compliant reporting and serves as the basis for a company's long-term strategy with regard to climate protection and sustainability.