A framework for assessing and managing dependencies in corporate transition plans

TL;DR

This paper introduces a framework to assess and manage external factors that influence corporate climate transition plans, emphasizing the importance of dependencies beyond a company's control.

Contribution

The paper introduces a novel framework for identifying and managing transition plan dependencies influenced by external factors like policy and technology.

Findings

Dependencies in corporate transition plans vary by firm characteristics, sectors, and geographies.

Quantitative and qualitative approaches can prioritize dependencies in transition plans.

A framework is proposed to identify, quantify, and manage external dependencies in climate transition plans.

Abstract

The urgency of mitigating climate change has increasingly driven companies to develop corporate climate transition plans (CTPs). Factors beyond the direct control of a company can significantly influence the successful implementation of CTPs, but this issue is not addressed comprehensively by existing scientific literature or CTP assessment frameworks. This article introduces the concept of transition plan dependencies, highlighting the necessity of considering external factors such as economic trends, technological advancements, policy environments, and sectoral transitions. Through a combination of a systematic literature review and semi-structured interviews, we propose frameworks and metrics for identifying, quantifying, and managing these dependencies. We use sectoral examples to illustrate the framework and quantification methods, and we suggest next steps to improve the analysis and the management of dependencies in corporate transition plans. This article aims to serve as a foundation for further academic research on transition plan dependencies and their practical applications.

•Companies’ climate plans can be constrained by factors outside their direct control•Dependencies vary by firms’ characteristics, sectors, and geographies, and over time•Dependencies can be prioritized using quantitative and qualitative approaches

Companies’ climate plans can be constrained by factors outside their direct control

Dependencies vary by firms’ characteristics, sectors, and geographies, and over time

Dependencies can be prioritized using quantitative and qualitative approaches

Environmental policy; Social sciences; Business

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