Assessment of the substantive and achievable character of a decarbonisation trajectory announced by a company or insured.
Transition plan credibility refers to the assessment of the substantive, governed and achievable character of an announced decarbonisation trajectory. A credible plan differs from a declarative commitment by several markers: dated interim targets rather than just a distant 2050 goal, scope 3 coverage, allocated investment resources, governance with executive accountability, and the absence of excessive reliance on carbon credits and doubtful additionality. For sustainable underwriting, the credibility of the insured's transition plan becomes an acceptance criterion: rather than abruptly excluding a carbon-intensive sector, the insurer can condition cover on a credible trajectory, an approach described as engagement rather than exclusion. This logic turns the underwriter into an evaluator of climate plans, a new function requiring analytical skills distinct from traditional actuarial expertise.
An insurer can maintain cover for a cement producer with an SBTi-validated transition plan, while excluding it in the absence of a credible trajectory.
transition plan, plan de transition, credible transition plan