What are the Transition Finance Guidelines?
Following the feedback received through the international consultation during the Winter, the Transition Finance Council (TFC) has continued to develop its ‘Transition Finance Guidelines’ to help capital providers identify credible transition finance opportunities.
The Guidelines focus on entity level financing in transitioning corporates or real asset operators (or ‘entities’).
The objectives of the Guidelines are to:
- Create consistent minimum expectations for transition finance - these may be applied to entities across different sectors and jurisdictions, including those without formal transition plans.
- Allow a practical assessment of credible transition - using Factors to assess the capacity of the entity to deliver expected decarbonisation and financial outcomes in the near- and medium-term.
- Complement existing frameworks - be interoperable with existing global and domestic frameworks applicable in different parts of the market for transition finance.
Download a two page summary of the guidelines.
What are the aims of the Guidelines?
The Guidelines aim to establish a continuous and reinforcing cycle between transition planning and the mobilisation of transition finance. A company’s transition planning acts as a foundational input for application of the Guidelines, which then facilitates the mobilisation of finance to support credible transition activities. This enables transition progress, which in turn generates insights that strengthen future transition planning and action.
What’s Next?
The TFC has published the Transition Finance Guidelines Exposure Draft with the intention to continue efforts on road testing and developing further assessment examples during this pilot phase. Learnings from this pilot phase will be incorporated into a future finalised publication.
Given the rapidly evolving expectations around the climate transition, it is acknowledged that the Guidelines cannot exist as a static document. Looking ahead, the TFC hopes to expand its international outreach with aim of increasing alignment on the approach to transition finance across the globe.
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“The Transition Finance Council has undertaken a significant level of engagement with domestic and international financial institutions in developing these draft guidelines, and this engagement will continue in 2026. It is pleasing to see that banks and asset owners and managers have already started testing the guidelines to inform their usability and practical application and the intention is that these guidelines become an industry reference point."
The Rt Hon. Lord Alok Sharma KCMG, Chair of the Transition Finance Council
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“Strong engagement across the sector on the Transition Finance Guidelines – from road-testing with stakeholders to bilateral engagement across markets – demonstrates a shared commitment to shaping guidance that can be credibly adopted and scaled.”
Vanessa Havard-Williams, OBE, Chair of Working Group 1, Credibility & Integrity
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