During Pure Strategies’ 2025 New York Climate Week Day of Action, Senior Sustainability Advisors Ariella Sela and Matt Kopac hosted a workshop on how to develop a robust climate transition action plan, or CTAP. This session highlighted that simply setting goals is no longer enough to drive credibility with stakeholders; companies must demonstrate how they are taking action to achieve those goals.
What is a CTAP?
The uptick in Scope 1-3 greenhouse gas (GHG) accounting and science-based target setting over the last few years has helped companies bring climate to the forefront of corporate sustainability agendas. With climate goals commonplace, companies must support their commitments with climate transition action plans (CTAPs).
A CTAP is a forward-looking, action-focused tool to move a company from climate ambition and goal setting to action and the execution of those goals. More simply, CTAPs answer the question, “What will it take for my company to achieve a net-zero future?” As outlined by the We Mean Business Coalition’s Climate Transition Action Plans: Activate Your Journey To Climate Leadership report, the four building blocks of a CTAP include the following:
- Emissions reduction strategy –How companies plan to mitigate their Scope 1-3 GHG emissions in line with a 1.5 °C scenario.
- Governance and business strategy integration – How companies plan to manage risks related to climate change and align governance practices with those risks.
- Public policy – How companies plan to advocate for policies and align trade organization and lobbying activities to support their climate targets.
- Just transition – How companies plan to consult and support key stakeholder groups, including their workforce, communities, suppliers, and others, as they implement their transition plan.
Regulatory pressure
International and local governments across the world have adopted, are considering adopting, or are phasing in regulations that legally require companies to develop CTAPs or key components of CTAPs. For instance, the state of California’s Senate Bills 253 and 261 require companies to disclose their corporate GHG emissions and climate-related financial risks—both of which are core elements of a comprehensive CTAP. Australia, Japan, and other countries also have regulations requiring companies to report on their climate transition strategies, closely aligned with theInternational Financial Reporting Standards(IFRS) Climate-related disclosures. Though the US Securities and Exchange Commission (SEC) determined earlier this year that it will not require companies to disclose climate-related indicators and the EU Parliament has recommended removing the CTAP requirement from the EU Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD), stakeholders will continue to expect companies to develop and disclose their plans to transition to a low-carbon future. This is evident in B Lab’s new standards for B Corp Certification, which now require all B Corps to implement climate transition plans and contribute to the global goal of net-zero emissions by 2050.
Driving business value
Beyond regulatory and voluntary disclosures, developing a robust CTAP can deliver business value across the organization. The process of creating a CTAP can drive internal alignment on cross-functional business priorities to integrate sustainability considerations into business planning. Assessing and identifying key climate risks as part of a CTAP can help adequately prepare for future climate-related impacts to the business and identify marketplace opportunities, such as product/service offerings and models, and energy security. A complete CTAP can also serve as a company-wide repository for tracking and planning all climate-related initiatives and progress.
Gaps to fill…
In 2024, CDP reported that nearly one in four companies disclosed having a CTAP aligned with the 1.5 °C target. While the number of companies with CTAPs increased by 44% from 2022, only 1% disclosed all CTAP-relevant indicators. These data reinforce what we heard during our Climate Week workshop—though many companies are addressing distinct components of their climate strategies, these efforts are often fragmented and exclude key elements needed for a comprehensive, strategic CTAP. Addressing these gaps and aligning existing efforts can help drive business value and meet regulatory requirements.
…but not starting from scratch
Fortunately, most companies are already working toward building a CTAP, whether they know it or not. Has your company accounted for Scope 1-3 GHG emissions and identified hotspots, set GHG reduction targets, conducted climate risk scenario analyses, engaged with trade or industry organizations, or developed sustainable sourcing programs and policies? If so, all of these are essential elements of a CTAP. The next step is to understand the gaps in your climate strategy, and importantly, how to fill them.
CTAPs are critical tools for building alignment and future-proofing business in the face of a changing climate. They transform ambition into action and are essential to demonstrate accountability and credibility in the market.
