For many SMEs, Climate Transition Plans (CTPs) may be a completely new concept - but CTPs aren't new.

Larger private and listed businesses have been required to develop them for some time under frameworks like the Task Force on Climate-related Financial Disclosures (TCFD), which is transitioning to International Sustainability Standards Board (ISSB) guidance in the UK, and Corporate Sustainability Reporting Directive (CSRD) in the EU.

A minority of SMEs have established CTPs too, often supported by investors or industry bodies. As an example, Seedling recently teamed up with the British Fashion Council to help 50 SME brands use CTPs to build sustainability into their growth plans.

Now, B Corps of all sizes will need to follow suit.

In this article, we’ll explore what Climate Transition Plans are, what a good CTP looks like, and why they matter under the new B Corp Impact Assessment (BIA).

What’s changing in B Corp's new standards?

The changes to B Corp's carbon reporting rules under the new standards can be summed up pretty quickly as:

• Old standards -> voluntary to measure and offset.
• New standards -> mandatory to measure and plan to reduce.

That's a big shift! But what does 'measure and plan to reduce' look like in practice? Specifically, under the new Climate Action topic, B Corp's will need to:

• Annually measure a full-scope carbon footprint (Scopes 1, 2, and 3) in line with the GHG Protocol.
• Set Net Zero targets that align with science-based pathways.
• Develop and implement a Climate Transition Plan that details how these targets will be met.
• Demonstrate progress on their CTP at each recertification cycle.

In this article, we're going to focus on the CTP. For more information on B Corp's Climate Action topic you can check out our dedicated guide here.

What is a B Corp Climate Transition Plan (CTP)?

A Climate Transition Plan is essentially a business’ roadmap for reducing its carbon footprint over time. It adds structure to achieving Net Zero emissions, helping teams to take practical steps toward decarbonisation rather than relying on ad-hoc initiatives.

So, what does good look like? As B Corp's draft standards set out, a robust CTP needs to include the core components set out in detail below.

Full scope GHG emissions inventory

The first step is to establish your baseline year for your carbon footprint - the reference point against which you'll track progress. What's important here is to make sure your GHG inventory is measured in line with the GHG Protocol methodology, and is a full-scope assessment (scopes 1, 2, and 3), meaning that it covers all sources of emissions.

Net Zero targets

Next, you’ll need to define your emissions reduction goals - your science-based Net Zero targets. This means setting targets aligned with the Science Based Targets Initiative (SBTi) framework, which ensures consistency with a 1.5°C pathway as set out in the Paris Agreement.

You'll need to set 2 targets:

• An interim target (also called a short-term target) for scopes 1 and 2, starting with 2030. You’ll need to review and reset this interim target every 5 years.
• Your long-term target - a commitment to reduce all emissions (scopes 1, 2, and 3) by at least 90% by no later than 2050, offsetting that remaining 10% through carbon removals.

Absolute vs. intensity

Businesses with <50 FTEs, or those who operate Impact Business Models (Renewable/Cleaner Burning Energy or Resource Conservation, with exact points criteria to be confirmed) can choose to set something called an intensity-based interim target. Specifically, these business can choose to commit to halving CO₂e/$million of revenue by 2030, in lieu of an absolute target.

GHG emission reduction plan

Now we get to the good stuff - how to reduce your emissions! This can seem like an overwhelming topic, so what's really important is to focus on keeping your approach structured. This avoids getting lost in the weeds, or a sea of opportunity.

Here's a framework any business can use to build an actionable emissions reduction plan (the same approach we take on the Seedling platform). You'll take into account the scale of potential reduction initiatives, but also other important aspects like cost, timelines, and feasibility.

Emissions reduction framework

Step 1: Hotspot Analysis

Now that you have a full-scope GHG inventory, you'll need to analyse your data to understand high-impact areas - a process called hotspot analysis.

• Arrange your emissions sources from high to low, using the structure of the GHG Protocol categories.
• For larger emissions categories (e.g., Purchased Goods and Services), drill deeper to pinpoint the biggest contributors.
• The goal is to produce a ranked list of emissions sources by impact.

Step 2: Assign Practical Steps

For each emissions source, identify potential reduction actions:

• Actions within your control (e.g., transitioning to renewable energy, improving energy efficiency, changing logistics providers).
• Actions requiring external collaboration (e.g., supplier engagement, lobbying for industry change).

Your strategy should be informed by third-party resources or expert guidance. Need ideas? Our Top 10 Decarbonisation Strategies for SMEs is a great starting point.

Step 3: Quantify Potential Impact

Once you've identified emissions reduction strategies, estimate their expected impact. This step helps gauge how effective each action will be in moving toward Net Zero.

Step 4: Consider Timelines, Cost, and Challenges

For each action, document:

• Expected timelines (near-term, medium-term, long-term).
• Resource investment (low, medium, high).
• Challenges & dependencies (supply chain barriers, regulatory considerations, etc.).

Step 5: Prioritise Your Action Plan

Using the insights from Steps 1-5, prioritize your emissions reduction actions based on:

• Impact: greatest potential for CO₂ reduction.
• Feasibility: taking into account any financial, operational, or technical constraints.

Define your Climate Transition Plan

Once priorities are set, it's time to communicate your plan of action through a clear implementation roadmap, including:

• Emissions pathway - mapped out progress from baseline emissions to your near-term target, based on the actions you plan to take and their estimated impact.
• Resource investment - for each action, both who from your team will be responsible, and any financial investment required.
• Stakeholder engagement - how you plan to get buy-in from and provide support to your team, suppliers, customers, and communities

Then there are then two final importance pieces:‍

Business model alignment

‍A successful Climate Transition Plan should be fully integrated into your broader business strategy, so that plans for growth and decarbonisation go hand in hand. Your plan should make it clear that the transition to a low-carbon economy is not just a side project, but that it's embedded into how your business operates. So, how exactly do you go about communicating that? Here are some practical demonstartes to ensure and demonstrate business model alignment with your CTP:

• ‍Governance: Make sure a member of senior leadership has oversight of and is accountable for your CTP.
• ‍Risk & Opportunity Mapping: Map out what a low carbon transition might mean for your market, and your core product/service offering. This sounds like a mammoth task for an SME, but it doesn't have to be - it may simply be a question that your team hasn't explored in a structured way before, and so flagging the climate-related risks and opportunities as a strategic priority is half the battle. You may even end up de-risking the business, or spotting opportunities for evolution in your product or services.

Board level sign-off

The final step, closely tied to governance above, is getting CTP approval from the highest-governing body.

‍Additional requirements for larger Businesses (250-999 employees or revenue >$75M & <$350M):

So far, the steps we've discussed have applied to business of all sizes. Large business will have to meet an extra 4 criteria, which we'll explain below.

Caveat: At Seedling, we don't work with businesses defined as 'X Large' and above by B Corp's standards - we simply aren't a great fit for teams of that size. This article won't discuss any additional requirements, such as climate scenario modelling, for teams defined as 'X Large' or above.

Back to it! So, if you're a 'Large business', you'll meet the same requirements as SMEs, plus:

Third-party verification of emissions data

This means getting your GHG emissions measured by an independent carbon accounting expert, whether that's a consultancy or carbon accounting platform like Seedling, who will assure that your full scope footprint has been measured in line with the GHG Protocol methodology.

Integrate climate targets into executive pay

To ensure climate goals are embedded in leadership accountability, large businesses need to integrate climate targets into executive remuneration. This means linking a portion of C-suite incentives (such as bonuses or long-term performance pay) to achievements in emissions reductions or climate transition milestones.

Plan for a Just Transition

This is best integrated into Step 4 of your GHG action planning. Larger businesses need to show that they've considered the social impact of decarbonisation on their stakeholders. The aim is to achieve equitable and inclusive progress toward Net Zero, often called a Just Transition, recognising that climate action can have negative economic and social consequences, particularly for those reliant on high-carbon industries. In practice, this normally means checking for unintended consequences before you make changes to your supply chain. You'll need to:

• Assess the changes you plan to make for potential risks to stakeholders.
• Mitigate these risks, for instance by providing training or financial support.

Check out our Just Transition explainer for a practical example. Whilst it's optional for the BIA, purpose-driven SMEs might want to consider just transition planning too!

How often do I need to update my B Corp Climate Transition Plan?

I've you're a 'Medium' business or smaller, you'll need to update your Climate Transition Plan every 5 years, which is the same frequency as you'll update your near-term Net Zero target.

'Large' businesses near to re-publish their Climate Transition Plan, including updated emissions figures and evidence of progress, annually.

All businesses will be expected to feedback on CTP progress at recertification.

How Can B Corps Prepare for the New Standards?

First things first, if you haven’t already measured your full-scope carbon footprint, now is the time to start. You'll then need to get stuck in with setting SBTI-aligned Net Zero targets, and following the GHG reduction framework set out above. Here are some handy resources to help you along the way:

We Mean Business Coalition - CTP Guide

CDP's Technical CTP Standards

How Seedling can Help

The introduction of Climate Transition Plans as a requirement under the new BIA marks a major step forward in making B Corps true climate leaders. While this may seem like a big shift for SMEs, it aligns with the broader direction of global climate regulation. By proactively preparing now, businesses can ensure a smooth transition and take meaningful action toward Net Zero.

At Seedling, we make climate transition planning simple and actionable for SMEs. Our platform guides you through the entire process, from measuring your full-scope carbon footprint to setting science-based targets and building a Climate Transition Plan. We provide expert one-on-one support, ensuring your plan is B Corp-ready while being realistic, cost-effective, and easy to implement. Whether you're new to carbon accounting or refining an existing strategy, we help you navigate the complexities with confidence.

Need a hand? Book a call with us.

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