[BREAKDOWN] E1-1: Transition plan for climate change mitigation

ESRS E1-1: Transition plan for climate change mitigation

Last updated: 08-08-2025

1. Introduction

As the world focuses on combating climate change, businesses are increasingly required to align their strategies with global sustainability goals. ESRS E1 mandates that companies disclose their plans for mitigating climate change, aligning their strategies and business models with the Paris Agreement's goal of limiting global warming to 1.5°C.

This article provides a step-by-step guide to preparing a compliant transition plan under E1-1, covering:

• GHG emission reduction targets (E1-6)

• Decarbonisation levers and key actions (E1-5)

• Investment and funding details (E1-5 and EU Taxonomy links)

• Assessment of locked-in emissions (E1-1(b)(iv) and AR 10-12)

• CapEx disclosure for fossil fuels (E1-1(b)(v) and AR 13)

• Alignment with the EU Taxonomy Regulation

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2. Strategy

In business terms, a strategy is a plan of action designed to achieve long-term goals, allocating resources and making choices to meet objectives. Under ESRS E1, strategy describes how climate change mitigation is embedded into the company’s business model, operations, and value chain. And how that approach is consistent with limiting global warming to 1.5°C and achieving climate neutrality by 2050.

3. Transition plan for climate change mitigation

Part of the strategy is the transition plan. The transition plan is a central part of ESRS E1 and must provide a coherent narrative of how your business model and strategy will transition in line with climate goals.

It integrates several other disclosure requirements (E1-5, E1-6, taxonomy KPIs) into one plan and should include:

1. GHG reduction targets (E1-6)

2. Decarbonisation levers and key actions (E1-5)

3. Investment and financial planning (E1-5)

4. Significant fossil fuel CapEx disclosure (E1-1)

5. Dependencies and locked-in emissions (E1-1)

6. Progress in implementation (E1-1)

7. Governance: the role of the administrative, management, and supervisory (AMS) bodies in overseeing and steering the plan

1. GHG emission reduction targets

The transition plan must:

• Present absolute targets for Scopes 1, 2, and 3 (gross, excluding removals/offsets).

• Indicate scope and gas coverage, baseline year, and target year(s) with interim milestones.

• State whether targets are science-based, referencing validation (e.g., SBTi) and methodology used.

• Explain compatibility with 1.5°C using sector-specific or economy-wide reference pathways.

• Link targets to the company’s overall business model transformation.

Example

We will cut absolute Scope 1, 2, and 3 emissions by 50% by 2030 and achieve net-zero by 2050. These targets are validated by the Science Based Targets initiative (SBTi) and benchmarked against a 1.5°C pathway for the manufacturing sector. By 2030, 80% of our energy will be renewable, supported by targeted CapEx in clean technologies.

[EXPLAINED] E1-6: How do you set greenhouse gas emission targets?

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2. Decarbonization Levers and Key Actions

As part of the transition plan (DR E1-1), companies must explain the main decarbonisation levers they will use, the key actions planned, and how these link to their GHG reduction targets (DR E1-6).

What to include: