Global Companies Raise Climate Goals Amid Policy Slowdown

In the face of policy headwinds and a slow-down in climate commitment-making, firms globally hugely lifted the ambition of their climate targets in 2024, the latest MSCI Transition Finance Tracker finds. Formerly known as the Net-Zero Tracker, this report offers a comprehensive analysis of corporate progress on climate action, based on data from the MSCI All Country World Investable Market Index (ACWI IMI). It includes insights from MSCI’s proprietary “Implied Temperature Rise” metric, tracking key themes such as greenhouse gas (GHG) emissions, corporate climate targets, financial flows, disclosure trends, the energy transition, and physical and nature-related risks.

In March 2025, 60.1% of listed companies had made climate commitments—two and a half times the 28% reached five years ago. The percentage was also flat on 2024, reflecting a plateau in the rate at which new climate commitments are being set. While the number of new commitments has slowed, those that have made them are showing more ambition. Particularly, the percentage of firms having science-based carbon reduction targets with SBTi certification increased tremendously to 14.2% in 2025 from merely 9.3% the year before. The targets are certified by Science Based Targets initiative (SBTi), which recognizes emissions reduction objectives in accordance with climate science.

In addition, the use of net zero targets continued to increase steadily. In 2025, 29.3% of firms had made company-wide net zero commitments, a slight rise from 28.9% in 2024 but a huge jump from just 4.5% in 2020. This increase reflects an increasing awareness among firms of the necessity for long-term approaches to climate change.

By sector, the industrials sector was the champion of climate ambition, with 21.5% of its companies having SBTi-validated targets, followed by 15.5% in the consumer discretionary sector, and 13.9% in the information technology sector. On the other hand, sectors with historically higher emissions trailed behind: only 3% of utility firms had validated targets, and none from the energy sector since the SBTi, as of now, does not validate targets from oil and gas firms.

One of the strongest trends noted in the report is the decoupling of business expansion from emissions. In developed economies, revenue for listed businesses jumped almost 50% from 2015 to 2023, as their emissions dropped by around 25%. The decoupling reflects that firms are discovering how to expand their businesses while lessening their carbon prints—a fundamental move toward sustainable growth. Emerging markets, at first, witnessed the rise in revenue and emissions side by side between the years 2015 and 2020. Post-2020, the rise in revenue started surpassing emissions, and by 2023, emissions were reduced even while revenue was still increasing.

At a regional level, developed economy companies made significant strides in reducing emissions. Between 2015 and 2023, Scope 1 (direct) emissions declined in the United States, Japan, Germany, and the United Kingdom, with the U.S. posting a 10% decline—the best performance among them. In contrast, emerging market companies, especially China and India, posted increases in emissions. In China, emissions almost doubled over the same period, a testament to the fast industrial expansion. India also saw increasing emissions, though at a slower rate.

Despite these positive trends, the report underscored that most companies remain misaligned with global climate goals. MSCI’s Implied Temperature Rise analysis revealed that only 12% of companies are aligned with the 1.5°C target set by the Paris Agreement. An additional 27% are aligned with a temperature rise between 1.5°C and 2°C. However, the median temperature alignment of all companies stands at 2.7°C—well above the levels deemed safe to avoid the worst effects of climate change.

Nationally, German firms were found to show the highest consistency, with a median temperature increase of 2°C, followed by France and the UK with 2.3°C. At the other end of the scale, companies from Saudi Arabia were found to be consistent in a temperature increase of 6.4°C, the maximum among all the countries studied. Chinese firms showed a median consistency of 3.3°C, indicating emerging economies' challenge of balancing economic development with climatic responsibility.

While the MSCI report indicates positive signals of ambition and emissions decoupling, it also underscores a long way to go. The climate strategies of the majority of companies are still below levels needed to meet global climate targets. Closing the gap will need more than pledges—it will necessitate transformative action across geographies and sectors.