Energy Transition Framework

Reaching net zero requires a transformation of how we produce and consume energy. This is complex and necessitates wider engagement on the concept of ‘transition’ to both reduce emissions and develop green alternatives, at the same time.

To achieve this at pace and scale, the world’s attention needs to go to where the emissions are. This means recognising the need to transition producers and consumers of fossil fuels in high-emitting sectors – such as heavy industry, energy, transport, and metals and mining – towards reaching net zero. The energy transition needs to engage incumbents in these sectors – including those who are not ‘green’ today but pursuing net zero in the future – to deploy their resources, capabilities, and capital to help accelerate global progress towards this goal.

To enable mainstream support for ‘transition’, stakeholders – notably investors, financiers, and insurers – as well as broader society, need an appropriate framework to identify transitioning companies, assess their progress, and track delivery.

In this paper, the Sustainable Markets Initiative (SMI) Energy Transition Task Force proposes a transition framework in support of global progress towards net zero greenhouse gas (GHG) emissions by recognizing the activities and impact of companies reducing and removing emissions, as well as those accelerating the development of low carbon solutions at scale.