Portfolio Emissions and the Ambition-Credibility Gap

About this event

Join Scientific Climate Indices webinar in partnership with Asset Impact, where we present new research assessing the credibility of companies’ decarbonisation targets and consider key implications for both equity investors and regulators. This study examines the consistency of corporate decarbonisation targets by comparing target-based projections with recent historical emission trends and capital expenditure-based (CapEx-based) projections across eight climate-critical sectors: Airlines, Aluminium, Automobiles, Cement, Electricity, Oil and gas, Shipping, and Steel.

The analysis combines company-disclosed information with a unique dataset of estimated emissions based on current and planned investments, benchmarked against the International Energy Agency’s Net Zero Emissions scenario. Results reveal an important ambition-credibility gap: although corporate targets may approximate scenario-consistent pathways, and ambitious targets are associated with more rapid decarbonisation, they appear highly ambitious relative to both recent historical performance and CapEx-based projections. This gap is particularly pronounced in absolute emissions, as many firms reduce emission intensity while sustaining or expanding production, thereby limiting the aggregate climate impact of target achievements.

This one-hour session will ask:

• How can equity investors respond? Can asset owners anchor stewardship strategies to relevant activity indicators, such as capital-expenditure plans? How might investors assess decarbonisation failure risk in portfolios that they believe to be ‘aligned’? Should regulators raise the bar on standardised disclosures?

• Do companies’ decarbonisation targets align with real activity, including historical emissions trends and capital expenditure-based projections? Data from listed firms across eight climate-critical sectors reveals a large ‘ambition-credibility gap,’ with substantial company-to-company variation.

• Are absolute emissions being overlooked? The gulf between long-term decarbonisation goals and current actions is particularly severe when examining absolute emissions rather than carbon intensity.