The vast majority, 98 per cent, of companies have not disclosed plans to shift capital away from carbon-intensive assets or to align spending with their long-term decarbonisation goals.

An analysis of over 2,000 publicly listed companies has found that they lack the core components of credible climate transition plans, according to new research published by the TPI Global Climate Transition Centre (TPI Centre) at the London School of Economics and Political Science (LSE).

The State of the Corporate Transition 2025 assessed companies on their management quality and carbon performance, two distinct but connected types of analysis of companies’ progress on the low-carbon transition. Management quality was analysed in 2,000 companies, representing $87tr in market capitalisation and approximately three-quarters of total publicly listed equities worldwide, and focuses on governance processes, while carbon performance focuses on benchmarking the emissions reduction targets of companies against Paris Agreement goals and was analysed in 554 companies selected primarily based on market capitalisation from 12 high-emitting sectors.

Almost all the companies assessed on management quality had a significant gap in transition planning and implementation, and although there had been a notable increase in long-term alignment since 2020, the authors found that the 554 companies assessed on carbon performance are “collectively set to overshoot their 1.5C emissions intensity budget by 61 per cent and their 2C budget by 13 per cent between 2020 and 2050.”

Aluminium, oil and gas, and coal mining are the most misaligned sectors, while shipping is the only sector undershooting its 1.5C benchmark, driven by two large firms with relatively ambitious net-zero targets.

Ali Amin, policy fellow, TPI Centre at LSE, said: “At a time of increasing transition headwinds, rigorous and transparent analysis is more critical than ever. Our analysis shows that companies are making some progress, but the vast majority remain off track for the Paris Agreement temperature goals. Companies need to accelerate emissions cuts and strengthen transition planning to give investors the confidence they need to invest.”

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