Active ownership: the investor's best tool for real climate accountability

As climate headlines grow louder and more divisive, investors face a simple choice: engage or risk being left behind.

Author

Maka Indorbaeva

Sustainability Analyst

ระยะเวลา: 2 นาที

วันที่: 03 พ.ย. 2568

In a year of political rhetoric questioning climate action—from Donald Trump’s campaign-trail scepticism to shifting regulatory winds in the US—investors might wonder: does decarbonisation still matter?

For anyone seeking long-term financial resilience, the answer is a resounding yes. Decarbonisation still matters, even when headlines suggest otherwise.

Despite the noise, many of the world’s largest companies are doubling down on climate commitments. Between late 2023 and mid-2025, the number of companies setting science-based decarbonisation targets surged by 227% (see Chart 1).

Chart 1: Companies doubling down on climate commitments

But ambition is only the starting point. The real test is delivery—and that’s where active ownership becomes essential.

Active ownership: turning pledges into progress

Active ownership means investors don’t just passively hold securities—they engage, challenge and hold management teams accountable for their climate strategies.

In today’s market, this is no longer optional. Active ownership is a crucial tool in an investor’s toolbox, enabling constructive dialogue with companies to ensure they are prepared and resilient in an energy transition.

Measuring and managing aggregate financed-emissions exposure is important. Why? Because financed emissions — those linked to companies held across equity and debt investments — represent potential energy-transition risks associated with decarbonisation. If these companies fail to decarbonise, it may place the long-term value of the portfolio at risk.

Case study: how engagement works

Since 2023, we have made it a priority to tackle the most carbon-intensive holdings within our portfolios. For twenty of these ‘highest financed emitters’, we’ve established over 75 engagement objectives, averaging nearly four objectives per company.

We track each objective to assess and accelerate progress on climate-related risks and opportunities. Using our ‘Maturity Scale Alignment’ framework in combination with our engagement efforts, we can analyse and determine how aligned companies are with their climate commitments.

We look for information beyond decarbonisation targets, delving into strategy, disclosures and capital allocation. We also seek to assess factors such as historical performance, climate governance, technology readiness and policy supportiveness. This data informs our engagement objectives and helps us hold companies accountable for their actions.

So far, almost one-third of these objectives have been fully met, while others are progressing through the complexities of the energy transition. This initiative now covers nature-related risks and human rights as well, and we will nearly triple our initial engagement footprint by the end of 2025.

What we learned

Execution gaps persist: While 90% of companies have pledged to achieve decarbonisation goals by 2050, 80% struggle to deliver actual emissions reductions (see Chart 2). That’s because some key decarbonisation technologies are still immature and/or lack scalability.
Policy uncertainty is a real barrier: Shifting US policies, such as the repeal of some clean energy tax credits from the Inflation Reduction Act and changes in Environmental Protection Agency regulations, are delaying some investment decisions, particularly in high-emitting sectors such as utilities and carmakers.
Caution among US companies: Many firms are pulling back from long-term decarbonisation targets unless delivery pathways are clear and predictable.
The transition isn’t linear: In sectors such as oil and gas or mining, decarbonisation strategies are vulnerable to commodity cycles. Companies may reinvest in low-carbon initiatives during boom times but revert to fossil assets in downturns.
Escalation works: When dialogue and engagement stall, voting against disputed management proposals can send a powerful signal and drive real change.

Chart 2: Decarbonisation alignment—a work in progress

Key investor takeaways

Scrutinise financed emissions: Know which holdings contribute most to your portfolio’s carbon footprint and engage directly with these companies.
Engage, don’t just observe: Ask tough questions about how companies plan to deliver on their climate pledges. Look for evidence of credible strategies, not just ambitious targets.
Use your voting power: When dialogue fails, use your votes to express concerns and reinforce accountability.
Expect non-linear progress: Be prepared for setbacks and cyclical challenges, especially in hard-to-abate sectors, or sectors where decarbonisation technologies are not developed and/or scaled up.
Broaden your lens: Climate risk is evolving; nature-related risks and human rights are also material to long-term value.
Be constructive: Companies operate within varying constraints, as investors we seek to be constructive and support companies navigating complexities.

Why this matters to every investor

Active ownership isn’t just for sustainability specialists or teams. It is a core part of risk management and long-term value creation.

In a world where climate policy and technology are in flux, investors who engage—rather than simply observe—are best positioned to build resilient portfolios.

Final thoughts

Active ownership is the investor’s best tool for driving real climate accountability. By engaging with companies, assessing their strategies and using escalation levers, such as voting power, when needed, investors can help shape a future that is not only more sustainable—but also financially resilient.