The future isn’t static: Science-Based Targets

About this episode

Most transition risk models assume a company’s emissions stay where they are today. Thousands of companies have published targets validated by the Science Based Targets initiative (SBTi), yet most investment data gives those commitments no weight. For companies that are cutting emissions, that can overstate future risk.

This episode covers our research into what happens to transition risk if companies meet the targets they have set.

What you’ll hear

We matched 4,053 absolute targets to 1,775 listed companies. They make up only 3.5% of listed companies but almost 20% of global public equity emissions. Each target becomes a straight-line path from a company’s baseline emissions to its target year.

We then recalculate Transition Value at Risk (TVaR) and temperature alignment on those paths and compare them with a flat baseline. TVaR generally falls once targets are included. If A.P. Moller-Maersk meets its targets, its TVaR falls to near zero in every scenario except the IPCC’s Net Zero 2050.

The gap between the two views shows where corporate delivery matters most, which helps investors decide where to focus engagement.

The method assumes targets are met in full, on a straight line. Around 62% of absolute targets can’t yet be matched to emissions data.

Read the full research

The white paper sets out the method in full, with the Maersk case study.

Read the white paper