Climate change is reshaping how businesses operate. Companies are under growing pressure to reduce carbon emissions, adapt their operations, and meet new disclosure requirements, regulatory standards, and stakeholder expectations.

A well-designed Climate Transition Plan (CTP) serves as a strategic action plan – helping companies reduce greenhouse gas (GHG) emissions, align with the Paris Agreement, and transform business models towards a low-carbon economy.

Success begins with understanding your baseline. Many companies underestimate GHG embedded in their business activities and supply chains. Without a clear picture, it's impossible to define realistic emission reduction targets or track progress.

KPMG supports you at every stage – from GHG emissions profiling to building and embedding your climate strategy. We can help develop credible CTPs aligned with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), the European Union’s Corporate Sustainability Reporting Directive (CSRD) and global best practices. 

Our goal: to help you reduce risk, ensure compliance, and unlock value on the road to Net Zero.

Let’s shape your transition – together.

Julian Meitanis
Julian Meitanis

Director, Corporate Sustainability Services

KPMG Switzerland

Manfredi Fiorillo
Manfredi Fiorillo

Senior Manager, Sustainability & Climate Advisory

KPMG Switzerland

What is a Climate Transition Plan and why is it important?

A strategic blueprint for climate action

 

The Carbon Disclosure Project (CDP) – a non-profit organization through which companies representing two-thirds of the world's market capitalization voluntarily disclose their sustainability progress – defines a Climate Transition Plan as a structured, time-bound action plan that enables a company to reduce its carbon footprint, adapt its operations, and align its strategy with global climate goals, including the Paris Agreement.

Much more than a list of carbon reduction measures, it's a business transition plan that integrates science-based targets, supply chains, financial planning, and ESG governance. The goal is to reduce greenhouse gas emissions across all scopes, contribute to limiting global warming, and future-proof business operations in a net-zero world.

Build resilience beyond emissions

 

A credible CTP includes measures for both climate change mitigation and adaptation, recognizing that even with efforts to reduce emissions, some impacts of a changing climate will persist.

For example, companies may need to redesign infrastructure to withstand extreme weather or shift sourcing strategies to counter supply disruptions. These are not just environmental strategies; they are business continuity imperatives.

Strategic and regulatory relevance

With extreme weather events, increasing climate-related losses, and growing regulatory scrutiny, climate transition planning has become essential. Transition plans not only help meet regulatory obligations, but also provide strategic benefits, such as increased investment attractiveness, market differentiation, and better risk management.

In this context, the question of «What is a transition plan?» is no longer theoretical – it's essential for any organization seeking relevance and resilience.

psychology

ESG strategy & transformation

Drive value for your organization by integrating sustainability in your corporate strategy.
Discover more

Transition Plan vs. Net Zero strategy

A net-zero strategy outlines an end goal and related principles. A transition plan outlines the step-by-step approach, key building blocks and mechanisms to get there, adding credibility and enabling success.

What are the benefits of a Climate Transition Plan?

An effective CTP has the capacity to transform risks into opportunities:

  • The market benefits from improved company valuation, increased attractiveness for investors, greater market share and additional revenue streams as demand for low-carbon products and services increases.

  • In terms of policy and legal implications, a well-designed CTP can ensure compliance with global regulations, thereby mitigating the risk of litigation arising from inadequate disclosure of climate-related financial impacts or inadequate mitigation and adaptation measures.

  • Technology plays a critical role in facilitating climate transition by enabling appropriate investment and effective timing of technology development and deployment of solutions. This process considers both short and long-term trends to create competitive advantages.

  • Finally, reputation is enhanced by meeting and exceeding external stakeholder expectations, thereby benefiting brand equity, financial performance and relationships through credible climate action.

What are the key elements of a Climate Transition Plan?

A well-structured plan addresses both the what and the how. It sets clear reduction targets and describes how those targets will be met across business operations and supply chains.

A CTP includes accountability frameworks, scenario analysis and other fundamental building blocks. These are further supported by global standards and frameworks such as the TCFD, the Transition Plan Taskforce (TPT) Framework and the CDP. Key components include:

    • Governance

      Oversight of the CTP by the highest governance body, with effective monitoring and mechanisms to ensure its implementation.

    • Financial planning

      Time-bound financial plan, including CAPEX, OPEX costs and savings as well as revenue estimates. Further supported by MACC (marginal abatement cost curves).

    • Transformation strategy

      Consideration of the transformative impacts on company model, products, markets, operations and value chain.

    • Enablers

      Appropriate carbon pricing, remuneration schemes, policies and processes that align with the Net Zero objective.

    • Culture & knowledge

      Ensure sufficient knowledge across the organization to drive the right behavior enable oversight.

    • Targets

      Time-bound and absolute, with interim 5-year targets, in line with the 1.5°C goal and supported by key actions across all emission scopes (incl. resource needs).

    • GHG footprint

      Use a reliable Scope 1-2-3 footprint as baseline year, ideally verified by a third party and use a consistent methodology for all subsequent years 

    • Decarbonization levers

      Key actions and plans tackling all material emission sources.

    • Engagement activities

      Value chain and sector engagement to enable change.

    • Scenario analysis

      Assess risks & opportunities in various transition pathways.

    • Monitoring and update

      Use quantifiable KPIs to track progress and apply corrective actions to the plan through well-defined and recurring processes.
       

    Best practice: Three pillars of a robust plan

    While the TCFD provides essential guidance on metrics, targets and transition plans, global standards such as the TPT Framework (now part of the IFRS Foundation) are often considered best practice for CTP disclosures.

    The TPT Framework is built around three core principles:

      • Ambition

        Setting science-based targets and aligning with policy

      • Action

        Creating a clear and realistic plan for implementation

      • Accountability

        Ensuring strong governance and tracking progress

      A CTP is also critical to avoid greenwashing. It ensures that ambition is matched by action, that both progress and challenges are transparent and that over-reliance on offsets or vague long-term promises is avoided.

      A strong CTP is fully integrated into the company's strategy, day-to-day operations and financial planning. These plans should be based on solid data, clear assumptions, and measurable outcomes. Tools such as internal carbon pricing and ESG-linked incentives – for example, tying executive compensation to emissions targets – can help drive real change. 

        What are the regulatory expectations in Switzerland and beyond?

        Swiss requirements

         

        Switzerland is committed to achieving net zero by 2050, in line with the Paris Agreement. This national goal includes reducing GHG emissions across all sectors, investing in climate adaptation and phasing out fossil fuels. Switzerland’s roadmap includes sector-specific pathways for industries such as construction, manufacturing, energy and the financial sector.

        In Switzerland, climate transition is now part of the law. Since 2024, the Ordinance on Climate Disclosures (Article 964a CO) requires large companies to disclose their climate transition strategies.

        From January 2025, the Climate and Innovation Act goes a step further. It requires companies not only to commit to net zero but also to report regularly on their progress.

        These rules are based in part on the TCFD recommendations and are aligned with international standards. Importantly, compliance is not just about ticking boxes – it means including climate-related information in financial reporting, such as scenario analysis for climate risks and opportunities.

        International standards

        In the European Union, the CSRD and the Sustainability Reporting Directive require companies to provide detailed climate reporting. Swiss companies with significant operations in the EU must comply with these standards directly or indirectly through value chain relationships. These rules emphasize the need for a transition plan example that is aligned with climate change mitigation and adaptation strategies, key enablers, effective governance and a financial quantification of climate-related risks and opportunities.

        Get ready in advance

         

        Frameworks such as the ISSB (International Sustainability Standards Board, part of the IFRS Foundation and which includes the TCFD) and the European Sustainability Reporting Standards (ESRS) give detailed guidance on how to report climate data and quantify risks. In our experience, companies should start preparing at least 12-24 months before the regulations apply to ensure they are ready and compliant. CTP are profound transformational exercises that require company-wide collaboration and buy-in at all levels of management.

        How to create your Climate Transition Plan

        Our approach is designed to guide you step-by-step through the complexities of aligning your business model to climate-neutral growth. We provide end-to-end support for your climate strategy, ensuring alignment with regulatory requirements and leveraging sector expertise on decarbonization. Our help is not limited to strategy and plan development but extends to implementation support and change management – fundamental phases where we help you remove any obstacle to success.

        Our proven approach to CTP development includes:

        CTP Graphic

        With our expertise, we are uniquely positioned to help you mitigate the risks of the climate transition and capitalize on related opportunities. While it is possible to create value is while decarbonizing, but the transformative impact of such goal requires a trusted partner to support you with best practices and sector expertise.

        Our priority is to enable your long-term success during this critical phase of societal development.

        How KPMG can support your transition

        End-to-end expertise: from strategy to execution, we provide comprehensive support and follow through with leading best practices.

        Cross-industry insights: leveraging in-depth industry expertise for tailored decarbonization solutions.

        Innovative tools & data analytics: data-driven modeling for precision and efficiency.

        Impact-driven approach: measurable, science-based outcomes for sustainable transformation.

        Climate financing: from internal carbon prices to public grants and private funding, we help Clients fund their transition to net zero.

        A structured approach to emissions reduction provides you with:

        1. Quick wins (1-3 years) – energy efficiency, operational optimization, foundations.

        2. Mid-term actions (3-7 years) – zero-carbon energy, enabled supply chain decarbonization, structural changes, product portfolio adjustments.

        3. Long-term transformation (7+ years) – scale-up of innovations, operational excellence, corporate resilience, value chain synergy and transformation.

        Reaching Net Zero emissions is a global imperative, and we now face the biggest transformation after the industrial revolution. Contact our experts to begin your journey.

        Meet our experts

        Julian Meitanis
        Julian Meitanis

        Director, Corporate Sustainability Services

        KPMG Switzerland

        Manfredi Fiorillo
        Manfredi Fiorillo

        Senior Manager, Sustainability & Climate Advisory

        KPMG Switzerland

        Related articles and more information

        article

        ESG & Sustainability

        Helping you build a sustainable future for your business.
        Read more
        article

        Comprehensive Climate Risk Management

        From regulation to resilience — learn how we can provide your company with practical climate risk solutions to help adapt, comply and grow in a changing climate.
        Read more
        article

        ESG in your value chain

        Enhance transparency across your value and supply chain
        Read more
        article

        ESG due diligence

        ESG due diligence continues to rise in importance, despite headwinds.
        Read more