Investors are moving beyond headline targets to scrutinise company transition progress. Alicia White, director of climate and nature solutions at Morningstar Sustainalytics, explains how the ability for investors to quantify the gap between climate ambition and real-world progress is becoming increasingly important.
Environmental Finance: Why are investors shifting from focusing on climate ambition alone to scrutinising whether actions match stated goals?
Alicia White: Demand for climate-aligned investment strategies remains strong – we continue to see sustained inflows into climate transition funds through 2025. Around 70% of asset owners we surveyed in our 2025 Voice of the Asset Owner survey say that climate is core to their investment strategy, and more than half view climate transition readiness as the most material environmental factor.
At the same time, global emissions are still rising. Despite the proliferation of corporate climate targets since the Paris Agreement, real-world outcomes have yet to align with those ambitions. That gap is prompting investors to ask tougher questions.