Climate transition plans now crucial for attracting $145 trillion in assets

Environmental disclosure platform CDP has reported a significant shift in investor and corporate behaviour regarding climate transition plans, highlighting their growing importance in managing an estimated $145 trillion in assets. This comes amid escalating investor demand for more robust and transparent climate strategies beyond traditional emissions targets.

According to CDP’s latest assessment, more than 12,000 companies disclosed facets of their climate transition plans in 2024, with around three-quarters detailing specific initiatives aimed at reducing emissions. However, the research underscored a critical gap: only one in ten companies revealed how capital expenditure (CapEx) aligns with their transition strategies. This lack of financial planning disclosure presents a notable shortfall, as investors increasingly expect businesses to integrate climate goals into core business models, investment decisions, and accountability mechanisms.

Transition plans today are expected to be comprehensive, demonstrating clear business strategy integration, responsibility allocation, skills requirements, and supply chain adjustments. Yet, relatively few jurisdictions currently mandate these plans, although this is poised to change with emerging regulations, notably in the European Union. In the absence of widespread mandates, investor pressure remains a powerful driver, with over half of the financial institutions disclosing via CDP having their own transition plans and using clients’ plans to guide investment due diligence.

The benefits of such strategies are tangible. Businesses that have implemented decarbonisation projects reported collective financial gains exceeding $54 billion in 2024, driven by lower energy costs and efficiencies such as fleet electrification. Companies with transition plans were found to be nearly twice as likely as their peers to identify short-term growth and cost-saving opportunities. This suggests that transition plans are no longer just about meeting long-term climate targets but also capturing immediate competitive advantages.

CDP CEO Sherry Madera emphasised the critical role of data in driving financing towards sustainable action, stating, “The transition to an earth-positive economy will not happen without finance, and finance will not flow without trust.” She highlighted the market’s growing ambition but urged businesses to tighten disclosure practices to build investor confidence and unlock the required capital flows.

In parallel, asset management firm Robeco has updated its Climate and Nature Transition Plan covering 2025 to 2030, signalling a strategic evolution. Unlike many peers, Robeco retains its ambitious 2030 climate targets, including a 90% cut in Scope 1 emissions and halving the carbon intensity of its investment portfolio. The updated plan shifts focus from solely portfolio emissions transactions to a more granular engagement with underlying companies, prioritising investments in firms authentically transitioning to low-carbon models, so-called climate transition leaders and solution providers. This approach reflects Robeco’s recognition that the real economy’s decarbonisation pace lags behind that of financial portfolios, despite the firm already achieving a 44% portfolio emissions reduction.

Robeco has also incorporated nature-related metrics into its roadmap, launching a “Biodiversity Solutions” assessment to identify companies addressing nature loss and preparing to align disclosures with the Task Force for Nature-related Financial Disclosures (TNFD) framework. The firm aims to expand client engagement on climate and nature issues from 40% to at least 60% of assets, with more targeted mandates and objectives. Robeco’s Chief Investment Officer Anton Eser stressed the unwavering commitment to science-based targets amid geopolitical uncertainties, noting, “The science hasn’t changed, so our course remains clear.”

Industry-wide, the number of companies disclosing 1.5°C-aligned climate transition plans rose by 44% recently, although only a small fraction, 2%, provide comprehensive data on all key indicators for credibility. This gap underscores ongoing challenges in transparency and standardisation, as detailed by CDP reports emphasizing the need for more robust plan disclosures to satisfy both investor scrutiny and evolving regulatory landscapes.

Meeting this demand, CDP has launched a new disclosure platform designed to streamline and standardize environmental reporting across 75,000 companies. The platform aligns disclosures with major global frameworks like the IFRS Sustainability Disclosure Standards (IFRS S2) and TNFD, supporting the growing appetite from financial institutions managing $142 trillion in assets for consistent climate and nature data integration.

For sustainability practitioners responsible for climate target-setting and emissions reporting, industry events such as edie 26 provide valuable forums to deepen expertise and network. Scheduled for March 2026 in London, edie 26 is set to feature sessions on reporting standards, Scope 3 emissions, and regulatory compliance, with keynote contributions from CDP and other sector leaders.

In summary, while corporate climate transition planning is gaining momentum, considerable work remains to enhance the quality and comprehensiveness of disclosures, particularly around financial alignment and nature integration. Leading investors and asset managers are evolving their approaches to ensure real-world emissions reductions and nature preservation are embedded across portfolios, reflecting an increasing convergence of environmental stewardship with fiduciary responsibility. The transformation towards a low-carbon, nature-positive economy hinges on building trust through credible, data-driven transition plans that resonate with both capital markets and the planet’s needs.