LSE report finds publicly listed companies lack credible climate transition plans
98% of companies disclosed no plans to shift capital from carbon-intensive assets or align spending with long-term decarbonisation.
The report comes as emissions intensity is set to overshoot. Publicly listed companies across high-emitting sectors are to exceed 1.5oC of the global emissions intensity budget by 61% between 2020 and 2050 on their current course.
Aluminium, oil and gas, and coal mining are the most misaligned sectors, while shipping is the only sector undershooting its 1.5°C benchmark, driven by two large firms with relatively ambitious net zero targets.
The authors also state that between 2020 and 2023, the average company in auto manufacturing and electricity reduced their emissions intensity at nearly five times the rate of their counterparts in cement and steel.
They mention that 'autos and electricity benefit from clearer, commercially mature decarbonisation options such as electrification and renewables, which can reduce uncertainty and support competitive positioning.'
Over 2,000 publicly listed companies lack the core components of credible climate transition plans according to the recent research by the TPI Global Climate Transition Centre (TPI Centre) at the London School of Economics and Political Science (LSE).
These companies represent US$87tln in market capitalisation and approximately three-quarters of total publicly listed equities worldwide
In the State of the Corporate Transition 2025, companies were assessed on their Management Quality and Carbon Performance. These were described by the LSE body as distinct but connected analysis of company progress on low-carbon transition.
Management Quality focuses on governance processes, while Carbon Performance focuses on benchmarking the emissions reduction targets of companies against Paris Agreement goals.
The companies studied for Management Quality span 24 sectors and were selected to capture the largest holdings in investor portfolios according to the body, focusing on firms with the largest market capitalisation and the biggest carbon footprints. Management Quality data is provided by London Stock Exchange Group (LSEG), TPI’s data partner
Carbon Performance is assessed in-house and is a more nuanced, resource-intensive assessment, applied to 554 companies selected primarily based on market capitalisation from 12 high-emitting sectors.
Less than 10% of companies meet any of the level 5 indicators.
Although there has been a notable increase in long-term alignment since 2020, the authors have found that the 554 companies assessed on Carbon Performance are 'collectively set to overshoot their 1.5°C emissions intensity budget by 61% and their 2°C budget by 13% between 2020 and 2050.
'Two newly-introduced analyses focusing on credibility found that companies must cut emissions far more rapidly than they have in recent years to align with the Paris Agreement’s goals, and that many rely on unproven technologies, with stark differences emerging across sectors.'
The TPI Global Climate Transition Centre (TPI Centre) is in their own words an independent source of research and data on the progress of corporate and sovereign entities in transitioning to a low-carbon economy. It is part of the Global School of Sustainability at the London School of Economics and Political Science (LSE).
