From ambition to advantage: How to make transition planning core to business strategy

Hannah Simons, Head of Sustainable Finance & Transition, Lloyds Corporate & Institutional

From ambition to advantage: How to make transition planning core to business strategy

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Facing into an uncertain environment, companies are grappling with competing priorities; on the one hand strengthening resilience and implementing their sustainability objectives, while on the other working towards their overall business goals. This becomes a delicate balancing act, and the solution lies in embedding transition planning into good business strategy to help organisations to articulate how they will deliver against their sustainability ambitions.

Since 2023, Lloyds’ Climate and Transition Strategy team has annually assessed over 100 corporate transition plans, offering guidance into how companies can develop these plans to be both forward-looking and value-generating. Based on our experience, the following are some of the most important elements to consider.

Hannah Simons,

Head of Sustainable Finance & Transition, Lloyds Corporate & Institutional

What do you perceive to be the biggest sustainability related driver of access to capital for your business?

Setting decarbonisation targets, such as net zero by 2050
Development of a transition plan embedded into
business strategy
Having sustainability-linked financing in place
Having strong ESG ratings from external providers

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Confidence through certainty

First, it’s important to start with the intended purpose of the transition plan. Stakeholders are looking to understand the financial impacts of the transition, and a transition plan enables line of sight from ambition to value generation. It offers insight into managing risks, optimising margins, safeguarding market access, and diversifying revenue-generating opportunities – all of which can sharpen your competitive edge.

Understanding the risks and opportunities presented by the transition to a low carbon economy, as well as exposure to extreme weather or nature dependencies, can help business leaders identify cost savings and revenue opportunities. By laying out a costed, strategic pathway for delivering transition ambitions, companies can strengthen stakeholder confidence and mitigate the risk of greenwashing.

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Ownership across the organisation

Transition planning is not a standalone ‘ESG’ task. Since it affects every aspect of the business, it must be jointly owned by finance, strategy, risk, procurement, HR and the board to be a truly integrated business strategy.

Most transition plan guidance centres on conducting robust risk and opportunity assessments, setting clear interim and long-term targets, developing an investment strategy, sharing your action plan, and putting governance structures in place.

The International Financial Reporting Standards (IFRS) guidance on transition planning (originally developed by the Transition Plan Taskforce) organises these principles around the ‘3 As’:

Ambition: Articulation of the entity’s strategic ambition, setting out baselines, objectives and priorities in the transition towards a low carbon, climate resilient economy.
Action: Translating strategic ambition into concrete, near-term interventions supported by a capital allocation plan.
Accountability: Enable delivery through robust governance and reporting.

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What ‘good’ transition planning looks like in practice

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Transition plans don’t have to be a standalone document: Leading corporates embed transition considerations into their capital allocation plans, product development, risk management processes, and engagement strategies.

A transition plan can be a tool to signal growth opportunities to stakeholders, including investors and financial institutions: A capital allocation strategy is key to demonstrate how you plan to deliver on your stated ambitions, and forward-thinking low carbon projects or initiatives may differentiate you from your peers.

Bring your stakeholders along the transition planning journey: Your transition plan becomes an implementable roadmap when you consult and work alongside your internal and external stakeholders.

Address how you’ll bridge the gap to reach future ambitions: Setting a net zero target, and reaching it by 2050 or sooner, will require a strategy that solves for residual emissions such as through participation in voluntary carbon markets.

Pinpoint and understand your dependencies: You may not have all the answers from day one. Acknowledge uncertainties and dependencies such as policy, capacity, finance, skills gaps, technological maturity, and data challenges.

Iterate and update your transition plan with time: Transition planning is not a ‘one and done’ exercise. Have a mechanism in place to iterate your plan as regulations, geopolitics, market conditions, and your business priorities evolve.

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Communicating with clarity

A fully integrated transition plan identifies the actions required to achieve climate, nature, and social objectives while mitigating risks and addressing dependencies. However, disclosing this succinctly and clearly is a challenge for corporates – and communication is the key to success.

Make it visual and easy to navigate: Provide a clear, upfront summary of your ambitions such as an infographic 'roadmap to net zero'; visual breakdowns of emissions support articulation of decarbonisation lever prioritisation.
Quantify your actions: Credibility can be driven by quantifying the impact of decarbonisation actions (for example, tonnes of carbon dioxide equivalent (tCO₂e) reduction, payback period), and numerical details in financial planning.
Demonstrate the work you are already doing: Highlight the outcomes of actions taken to date, such as through case studies to evidencing capital alignment (for example, CAPEX, OPEX, revenue) with the transition.

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Planning for change

At Lloyds, we believe that investing time into our client relationships enables us to truly understand our clients’ businesses, which in turn makes their transition planning even more effective.

In 2025, we undertook 108 detailed Client Transition Plan (CTP) assessments, representing £14.7 billion of drawn lending. This consultancy supported clients across the economy in sectors ranging from oil and gas, power and utilities, aviation, automotive original equipment manufacturers (OEMs), road transport, manufacturing, leisure, food and drink, and retail.

Our approach is defined by three central pillars; we identify where clients may need our support to achieve their decarbonisation ambitions, where we can act as expert advisers, and where we can seek out financing opportunities to help drive a real-economy transition. To learn more about how Lloyds has made a tangible difference to clients’ transition journeys, as well as best practice examples, read our recent CTP Insights Report.

All lending is subject to status. Eligibility criteria apply.

Our collaboration with clients provides us with deep and practical expertise in what it takes to facilitate a real-world transition. Since investors, regulators, and stakeholders reward credibility over claims, we believe transition planning is key to protect cash flows and demonstrate durable value creation.”

Hannah Simons,
Head of Sustainable Finance & Transition,
Lloyds Corporate & Institutional