A new analysis from MSCI shows that fewer than four in ten listed companies worldwide currently have emissions trajectories aligned with global climate goals. According to MSCI’s latest Transition Finance Tracker, only 38% of companies are on pathways consistent with limiting global temperature rise to below 2°C above preindustrial levels this century.

The findings underscore a persistent gap between corporate climate ambition and the pace of emissions reductions required to meet internationally agreed targets, even as more companies continue to publish climate commitments and adopt formal decarbonisation strategies.

What the Data Says About Temperature Alignment

MSCI assessed companies within the MSCI All Country World Investable Market Index using its Implied Temperature Rise metric, which estimates how current and projected corporate emissions translate into future global warming outcomes. The analysis shows that just 12% of companies are aligned with the more ambitious 1.5°C threshold.

At the other end of the spectrum, nearly two-thirds of listed companies remain on trajectories that would push warming beyond 2°C. More concerning, 26% of companies are aligned with pathways implying temperature increases above 3.2°C. Taken together, the aggregate emissions trajectory of global listed companies points toward an implied warming of around 3°C.

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Regional Differences Highlight Uneven Progress

The report reveals significant variation across countries and regions. Among developed markets, companies headquartered in Italy, Germany, France, and Japan show comparatively lower implied temperature rises, ranging from 1.8°C to 2.4°C. These figures suggest relatively stronger alignment with climate transition pathways, although still not universally consistent with a 1.5°C goal.

In contrast, companies in several emerging markets exhibit much higher implied temperature increases. MSCI’s analysis places Saudi Arabia, Indonesia, India, and China among the countries with the most carbon-intensive corporate trajectories, with implied warming outcomes ranging from 4.4°C to as high as 10°C. These disparities reflect differences in energy systems, industrial structures, and the pace of policy-driven decarbonisation.

Climate Target-Setting Continues, but Alignment Lags

Despite the misalignment between emissions trajectories and climate goals, MSCI notes that corporate climate target-setting continues to expand. As of December 2025, 60% of listed companies had disclosed some form of climate commitment, a marginal increase from 59% in 2024 and a sharp rise from just 26% in 2020.

Net-zero pledges are also becoming more common, with 32% of companies now having set company-wide net-zero targets. While the year-on-year increase has slowed, this still represents a significant shift from 2020, when only 5% of companies had adopted such targets.

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Rising Ambition and Improved Disclosure Quality

While the pace of new commitments is moderating, MSCI highlights a notable increase in the quality and ambition of corporate climate goals. The proportion of companies with emissions targets approved by the Science Based Targets initiative has risen sharply, reaching 19% in 2025, compared with 14% in 2024 and 9% in 2023. This trend suggests growing uptake of externally validated, science-aligned decarbonisation pathways.

Disclosure practices are also improving. By the end of 2024, approximately 79% of companies reported Scope 1 and/or Scope 2 emissions, up from 76% the previous year. Reporting on Scope 3 emissions, often the most complex and material category, increased to 56%, compared with 51% a year earlier.

A Widening Gap Between Commitments and Outcomes

MSCI’s findings point to a growing tension in corporate climate action. While more companies are setting targets and improving disclosure, the majority remain misaligned with climate pathways consistent with global temperature goals. For investors, policymakers, and regulators, the data reinforces the need to look beyond pledges toward measurable emissions reductions and credible transition strategies.

As capital markets increasingly integrate climate risk into decision-making, the gap between stated ambition and actual emissions performance is likely to become a defining issue for corporate valuation, access to finance, and long-term resilience.

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