Any organisation seeking certification at Step 2 or 3 of the CO₂ Performance Ladder must draw up a Climate Transition Plan (CTP). In this plan, you use concrete targets, measures and a timeline to set out how your organisation will work towards CO₂ reduction over the medium (5 to 10 years) and long term (2050).
The Climate Transition Plan is one of the new elements in Handbook 4.0 of the CO₂ Performance Ladder. The CTP responds to organisations’ need to map out a practical, structured route towards zero emissions and to meet national and international climate goals.
The Ladder’s Climate Transition Plan is aligned with the Climate Transition Plan under the EU’s Corporate Sustainability Reporting Directive (CSRD). There are, however, a few important differences. The Ladder CTP is more concrete when it comes to setting targets and measures for bringing emissions down. The CSRD version focuses mainly on risks and opportunities and how an organisation responds to them. The CO₂ Performance Ladder’s CTP is therefore more ambitious than under the CSRD.
According to the short definition in Handbook 4.0, a CTP is the organisation’s “long and/or medium-term strategy for CO2 reduction”. In its detailed definition, the Handbook describes a strategic, financially substantiated plan. In it, you describe how your organisation will reshape its strategy, activities and governance model towards zero CO₂ emissions by 2050, and how you will make your business model future-proof.
You only need to draw up a Climate Transition Plan from Step 2 of CO₂ Performance Ladder 4.0 onwards. The CTP for Step 2 focuses on:
For Step 3, the CTP expands to cover:
In addition to your Climate Transition Plan, you draw up an Action Plan. In it, you describe your short-term targets and actions — that is, for the coming years. Although you do not need a Climate Transition Plan for Step 1, you do prepare an Action Plan for emissions reduction at this Step.
What exactly do you put in a Climate Transition Plan? A CTP usually consists of six main components:
In your CTP, you describe the impact the climate transition has on your core activities, such as the products you make or the services you provide. You also consider developments such as grid congestion or geopolitical tensions. You indicate the extent to which the transition and these developments affect your activities, and what the opportunities and risks are for reducing your emissions. If you are part of an international company, you describe the relationship between your organisation’s strategy and the strategy at international level.
For your CTP, you must use scientifically substantiated, measurable and time-bound targets for energy saving and emission reduction. You do this for the short, medium and long term. You also make clear how these targets contribute to achieving the 1.5°C pathway of the Paris Agreement.
To draw up a plan, it is important to name concrete actions and measures — for example, how you will adapt your products, services or activities so that you emit less CO₂. Here you consider, among other things, procurement and design choices, the use of renewable energy, electrification, energy efficiency, innovations and collaboration with value chain partners.
Your actions and measures need to include how you will pay for them. This concerns capital expenditure (capex) and operating expenditure (opex), and how these fit within your organisation’s financial plans and growth strategy. You also assess your locked-in emissions: emissions from assets such as office buildings or factories that you will have regardless, because you cannot replace these assets with cleaner alternatives in the coming years.
Within and outside your organisation, various people, departments and parties have a role in CO₂ reduction — from employees and directors to shareholders and value chain partners. In your CTP, you make the roles and responsibilities of each party clear. You also ensure that you integrate your CTP with your general organisational policy and link it to Key Performance Indicators. This gives you an incentive to promote emissions reduction within your organisation and across your value chain.
Another important requirement is that you clearly show how your CTP has been developed. How did you draw up the document, how was your footprint compiled, what assumptions did you make, and how did you verify and validate everything internally and externally? How do you follow up on your CTP periodically and report on progress? You also show how you communicate internally and externally, and how everything relates to the standards of other frameworks, such as the Carbon Disclosure Project and the CSRD.
Several additional requirements apply to the CTP:
Your Climate Transition Plan must be available during the initial audit.
For the recertification audit — which takes place every three years — you must revise your CTP to reflect the most up-to-date situation. If a major change occurs in the meantime, such as entering a market on another continent or acquiring a company, this may be a reason to update your CTP sooner.
Within your CTP, you position your organisation’s climate ambitions against a sector benchmark. This shows how ambitious you are compared with others in your sector.
For your CTP, you must also analyse your knowledge and collaboration needs. What knowledge do you need in-house, and what collaboration is required to secure the transition?
Another requirement is that you enter into discussion with a party in your value chain. For Step 3, you must additionally hold a dialogue with an external expert drawn from a list compiled by SKAO.
Finally, in your Climate Transition Plan you set out how you communicate about your targets, actions and timeline internally and externally — for example, through publications on your own website and on that of the CO₂ Performance Ladder.
“The CTP responds to organisations’ need to map out a practical, structured route towards zero emissions and to meet national and international climate goals.”
Bart de Bruyckere
In the video below, Bart De Bruyckere of the Belgian Association of Large Construction Contractors (ADEB-VBA) and member of the Central College of Experts (CCvD) explains what a Climate Transition Plan is and the components which make up a CTP.
In the video (with English subtitles), the speakers also answer questions from organisations that attended the session. The most important questions asked are addressed in the FAQ below. If you still have questions after watching the webinar session, please contact us.
A Climate Transition Plan describes how an organisation will reduce its greenhouse gas emissions in line with its climate objectives. It sets out the measures the organisation is taking, the investments and resources required, the risks and opportunities involved, and how progress is monitored.
Within Handbook 4.0 of the CO₂ Performance Ladder, the Climate Transition Plan underpins the chosen reduction strategy. It helps organisations not only set reduction targets, but also show how these will be achieved over the medium and long term.
During the development of Handbook 4.0, certificate holders, contracting authorities and other stakeholders asked for greater emphasis on the medium- and long-term approach to CO₂ reduction. The Climate Transition Plan addresses this.
Annual reduction targets mainly provide insight into the short term. A Climate Transition Plan shows how an organisation is developing its operations step by step towards a structurally lower level of emissions. This looks not only at today’s emissions, but also at future developments, dependencies in the value chain, required investments and strategic choices. The Climate Transition Plan helps organisations shape this transition in a structured way and shows how reduction targets can actually be achieved.
No, this is generally not necessary. A good Climate Transition Plan can often serve as the basis for several frameworks. The CO₂ Performance Ladder, the CSRD and the SBTi each have a different focus, but all require insight into emissions, reduction targets, measures and progress. It is therefore advisable to draw up one integrated Climate Transition Plan that can be used for various reporting and certification purposes. An important condition for this is that the organisational boundary is consistent across frameworks.
Locked-in emissions are future emissions that result from choices made today, such as investments in buildings, equipment or long-term energy contracts.
The purpose of mapping locked-in emissions is to gain insight into future dependencies on emission-intensive activities. This allows organisations to investigate available alternatives in good time.
The handbook does not require locked-in emissions always to be quantified separately. Quantification can be helpful, but what matters more is that organisations understand where future emissions may arise and how these can be prevented or limited.
Yes. Bringing scope 3 emissions down to zero is an important part of the Climate Transition Plan. At Step 2, this concerns only the scope 3 emissions of the organisation’s main activity or activities. At Step 3, it concerns all scope 3 emissions, both upstream and downstream.
For many organisations, scope 3 emissions form the largest share of their climate impact. Examples include purchased materials, transport, subcontractors, product use, waste processing and digital services.
A Climate Transition Plan that looks only at scope 1 and 2 emissions therefore often fails to give a complete picture of an organisation’s real climate impact.
Handbook 4.0 deliberately avoids the term ‘net zero’, because ‘net’ leaves room for compensation. With ‘zero’, there is no such room: the aim is for suppliers, too, to ultimately become emission-free.
This requires collaboration with suppliers, subcontractors and other value chain partners. No one needs to be emission-free tomorrow, but a credible strategy does include a concrete plan to make the value chain more sustainable step by step.
Climate targets must be both ambitious and well substantiated.
The Climate Transition Plan shows which reduction targets the organisation is pursuing, which measures will be used to achieve them, and how progress is tracked. Targets should also match the organisation’s activities and be based on realistic assumptions.
Organisations distinguish between short-, medium- and long-term targets. This creates a coherent route towards structural emission reduction.
Medium-term targets form the link between an organisation’s short- and long-term targets.
They show which steps are needed to achieve the long-term ambition and help organisations adjust course in good time when circumstances change, for example due to technological developments, changing regulations or new insights.
A Climate Transition Plan therefore describes not only the ultimate ambition, but also the milestones along the way.
Uncertainty is inevitable once you look more than a few years ahead. New technology, changing regulations, the availability of sustainable materials and a shifting energy market can all change along the way.
A Climate Transition Plan is therefore never finished. Organisations update it regularly, so that the strategy keeps pace with what is actually happening.
Long-term targets must be ambitious, and the assumptions on which they are based must be made clear. Because future technologies and market conditions are always uncertain, organisations need to work with scenarios, interim milestones and periodic reviews of their Climate Transition Plan. Organisations should also be transparent about the barriers they still see and work together with others to address them.
For many CO₂-intensive materials, fully emission-free alternatives do not yet exist. Organisations can still take steps by reducing material use, applying circular solutions, encouraging suppliers and tracking new technologies such as green steel. A Climate Transition Plan describes how these steps are built up over time. It can also map out which innovations are coming, their level of maturity (Technology Readiness Level, see also Handbook 4.0) and the impact this will have on CO₂ emissions.
The CO₂ Performance Ladder does not distinguish between a best-efforts obligation and an obligation of result over the medium and long term. In the short term, an obligation of result (or realisation) applies.
Organisations are, however, expected to draw up a Climate Transition Plan for the medium and long term with substantiated targets, appropriate measures and a realistic implementation strategy. Progress is also expected to be monitored regularly, evaluated and adjusted where necessary.
No. Green steel reduces emissions in an organisation’s own purchasing chain (upstream scope 3). It is therefore ordinary emission reduction, not an avoided emission.
Biobased materials can contribute to lower production emissions, reduced use of fossil raw materials and temporary carbon storage. It remains important to consider the full life cycle of materials when assessing climate impact. Within the Climate Transition Plan, biobased materials can therefore contribute to actual emission reductions in scope 1, 2 and 3, as well as playing a role in Other Influenceable Emissions.
Suppliers and (sub)contractors play an important role in achieving climate targets in scope 3. A growing number of organisations therefore ask suppliers and (sub)contractors for insight into emissions, reduction targets, and sustainable equipment and materials. This can range from an organisation’s own scope 1 and 2 emissions to emissions per tonne of product or emissions relating to project delivery. Collaboration tends to be more effective than simply imposing requirements. The requirements under Angle D of the CO₂ Performance Ladder offer various starting points for this.
Avoided emissions can demonstrate the positive contribution a product or service makes to emission reduction beyond an organisation’s own CO₂ footprint. They never replace the need to reduce an organisation’s own emissions, and are not deducted from its own CO₂ footprint.
Within the CO₂ Performance Ladder, avoided emissions form part of Other Influenceable Emissions (OIE). At Step 2, a qualitative analysis of relevant OIE is required. At Step 3, relevant OIE, where applicable, must be substantiated quantitatively and included in targets, implementation, communication and collaboration. At Step 3, they therefore form part of the Climate Transition Plan.
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