The vast majority of publicly traded companies lack sufficient, credible plans to address rising global temperatures and their effects, a new analysis released by the London School of Economics and Political Science has found. 

"As the pace of required emissions reductions accelerates, credibility will increasingly depend on plans that are both ambitious and actionable," wrote the authors of the report, 2025's State of the Corporate Transition. 

What's happening?

Across 24 sectors, the researchers examined 2,000 companies, which collectively represent a market capitalization of $87 trillion and about 75% of publicly listed equities globally.

The report "assessed companies on their Management Quality and Carbon Performance, two distinct but connected types of analysis of companies' progress on the low-carbon transition," according to a press release. "Management Quality focuses on governance processes, while Carbon Performance focuses on benchmarking the emissions reduction targets of companies against Paris Agreement goals."

The results were alarming. The release described that "98 percent of companies have not disclosed plans to shift capital away from carbon-intensive assets or to align spending with their long-term decarbonization goals."

However, the low governance and carbon-performance scores did not appear to be due to a lack of recognition of the reality of rising global temperatures. To the contrary, 95% of the companies examined did have a publicly available environmental policy, according to Insurance Journal. The researchers simply found these policies to be grossly inadequate compared to the scale of the challenges companies face.

In other words, nearly all the policies reviewed lacked adequate, realistic plans to address challenges related to rising global temperatures and to prepare for a global transition to clean, renewable energy. As such, these ineffectual policies could be seen as amounting to little more than corporate greenwashing.  

Why is this important?

For so many companies, representing such a large percentage of the world's total investments, to be this lacking in adequate plans exposes just how ill-prepared the global economy may be for a future of climbing temperatures and their effects.

According to research cited by Insurance Journal, rising global temperatures are expected to result in a 17% reduction in global economic output by 2050, a figure that is expected to jump to 60% by 2100.

But these impacts are not limited to the distant future. The Network for Greening the Financial System has projected, as cited by Green Central Banking, that in the next five years, extreme weather disasters — such as intensifying heat waves and hurricanes — could reduce global economic output by 3%. 

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"Climate change is not a distant threat — it is a current reality reshaping our economies and financial systems," said Sabine Mauderer and Livio Stracca of NGFS, per Green Central Banking. "Understanding the immediate impact of climate-related risks has thus become an urgent necessity." 

What's being done about it?

From scientists to economists, a recurring theme among experts has been that the dire projections for the world's environmental and economic future can be adjusted if appropriate and timely action is taken. But as 2025's State of the Corporate Transition report revealed, some of the world's most powerful, influential, and wealthy global actors appear to be woefully unprepared. 

However, there are still steps that individuals can take to push for necessary change. Consumers can choose to buy products from and invest in companies that boast strong, evidence-based environmental plans. Where we put our dollars is what we support, at least financially.

To encourage effective steps at the political level, residents can also contact their elected officials and support candidates who are taking strong, decisive action to address the heat-trapping pollution warming our world.

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