Transition Finance Tracker

Research Paper
July 23, 2025

Preview

While the share of the world’s listed companies with a climate target approved by the Science Based Targets initiative (SBTi) rose to 18.5% as of June 30, 2025, up 6.2 percentage points year over year, companies would drive a rise in global temperatures of 2.7°C (4.9°F) above preindustrial levels based on their emissions trajectories.

Those are among the findings in the latest quarterly edition of the MSCI Institute’s Transition Finance Tracker. The report offers a snapshot of the transition in charts and analysis covering emissions, physical risk, targets, disclosure and financial flows.

Projected temperature alignment of the world’s listed companies (Implied Temperature Rise in °C)

Data as of June 30, 2025. Not index weighted. The dataset used in calculating implied temperature rise comprises roughly 95% of ACWI IMI constituents, as roughly 5% of companies lack sufficient data to compute the relevant measures. Source: MSCI ESG Research

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Materiality-Weighted Portfolio Carbon Footprint

We found that, over the past decade, emissions-based transition risk had a stronger relationship with corporate earnings, stock performance and credit risk than previous academic studies suggested.

Energy Transition Framework

Assess how the energy transition may impact your portfolio and see which companies are positioned to lead with MSCI’s Energy Transition Framework

Does the Mortgage Market Price in Physical Risk?

How has increased physical risk from natural disasters affected residential mortgage and residential mortgage-backed securities? To find out, we turned to MSCI GeoSpatial Asset Intelligence.

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