As international attention turns to the long-anticipated COP30 in Brazil, geopolitical tensions are at a historic high, both linked to and independent of climate change. Last week’s UN Climate Summit highlighted the continued division among world governments on the pace of decarbonization, with Trump going so far as to deny the existence of climate change.

It is becoming increasingly important for the private sector to take initiative on climate targets rather than relying on political systems that remain gridlocked. While more companies are acknowledging their role in driving climate change, this awareness has yet to translate into meaningful action for the vast majority of them. 

Ultimately, it is essential to focus on what companies are doing, not simply what they say. As wildfires blaze, reservoirs run dry, and extreme weather events disrupt communities, people bearing the consequences are left wondering: when will action actually be taken, rather than just promised?

From Promises to Practice: Differentiating Targets from Realities

The State of the Corporate Transition 2025 report, published by the TPI Global Climate Transition Centre (TPI Centre) at the London School of Economics and Political Science, evaluates 2,000 of the world’s largest emitters across 24 sectors, representing three-quarters of global listed market value. The study focuses on publicly listed companies with the largest market capitalisation.

The researchers found that 98% of companies have not disclosed plans to shift capital away from carbon-intensive assets or to align spending with their long-term decarbonisation goals. Publicly listed companies across high-emitting sectors are on track to exceed the 1.5°C global emissions intensity budget by 61% between 2020 and 2050.

The study draws on public disclosures and assesses companies through two lenses: Management Quality, which examines governance and transition planning, and Carbon Performance, which benchmarks emissions against international climate goals.

Together, these perspectives provide a more complete picture, not only of the ambition of emissions targets, but also of the governance and transparency required to make those targets credible. The report also considers whether the technologies companies intend to rely on for decarbonisation are sufficiently advanced to deliver at scale.

The Reality Behind Corporate Climate Targets

Overall, the share of companies aligned with the 1.5°C benchmark has more than tripled since 2020, rising from 9% to 30%. Despite this improvement, the majority remain unaligned with Paris Agreement goals.

Long-term net-zero pledges have become widespread, but most companies continue to postpone substantial emissions cuts into the future, with few setting ambitious near-term targets, which undermines the credibility of their commitments.

Overall, the analysis reveals that net-zero plans are rarely underpinned by robust transition strategies or effective implementation. Achieving them would require emissions reductions beyond what companies have achieved in recent years. A further concern is that many of these plans rely heavily on unproven technologies, such as large-scale carbon capture and storage and direct air capture.

Looking at emissions pathways, companies are collectively set to overshoot their 1.5°C carbon intensity budget by 61% and their 2°C budget by 13% between 2020 and 2050.

The study highlights sharp differences across sectors: aluminium, oil and gas, and coal mining are the most misaligned with climate goals, while shipping is the only sector performing better than its benchmark. In terms of technological readiness, airlines and cement industries are furthest behind, while the automotive and electricity industries lead the way.

For decarbonization strategies, carbon capture and removal technologies remain at the lowest readiness levels, while renewables are the most advanced. Most companies are currently overstating their transition plans by relying on carbon capture, which does not reduce emissions at the source and faces significant scalability limitations. By contrast, renewable energy has proven profitable and directly drives long-term reductions in emissions.

Persistent Corporate Gaps

Although companies are integrating climate considerations into operations, most still fall short in assessing climate risks, developing credible transition strategies, and implementing effective solutions.

With climate change driving significant economic risks and global instability, investors are increasingly relying on independent data to assess corporate climate action. Companies should anticipate that, in the near future, investors will demand more detailed assessments of climate transition plans, along with evidence of their effectiveness and impact.

Many companies are publicly setting ambitious climate targets, yet they continue to lobby for policies that weaken or delay climate action. This disconnect not only undermines a company’s credibility but also poses systemic risks, as corporate advocacy plays a decisive role in shaping climate policy. For investors, holding companies accountable for aligning their lobbying with their climate goals is essential to ensure targets translate into real-world progress rather than greenwashing.

At the same time, while more firms are disclosing their reliance on offsets, almost none are aligning their capital expenditures with decarbonization goals. Fewer than 1% of companies are directing investment toward low-carbon strategies, and only 2% have committed to phasing out spending on carbon-intensive assets. This lack of financial alignment leaves companies without clear pathways to fund emissions reductions or retire high-carbon infrastructure.

Delaying action will ultimately harm companies themselves. A recent global poll of 130 risk managers found that most firms are failing to assess climate risks that could disrupt critical infrastructure and supply chains. Companies are still narrowly focused on risks to their own assets, leaving them unprepared for the potential cascading impacts that could affect the broader economy.

As long as companies continue to underinvest in decarbonisation, lean on unproven technologies, and lobby against climate progress, their net-zero pledges will ring hollow.

Editor’s Note: The opinions expressed here by the authors are their own, not those of impakter.com — Cover Photo Credit: Charles Forerunner