From ambition to delivery: are net zero plans holding up?

Since 2022, we’ve assessed the highest-emitting companies across our firm-wide portfolios – those driving the largest share of financed carbon emissions – through our Net Zero Stewardship Programme Climate Transition Assessment (CTA).

This programme forms part of our investee company engagements and is designed to assess not just ambition, but whether transition plans are credible in practice.

As part of this engagement programme, in 2025 we engaged with 61 companies, which has increased from 29 companies in 2022, reflecting a deliberate effort to broaden coverage and engage more companies to continue the momentum for progress.

What the data shows (by sector)

Over the past four years, a clear pattern has emerged. The focus has shifted from setting targets to delivering against them, but progress has not been linear. Instead, outcomes have diverged, some companies improving their transition strategies, while others stall or even step back.

At the same time, delivery is becoming increasingly dependent on external factors. Policy support, infrastructure and technological development are now critical constraints, particularly in sectors with more complex decarbonisation pathways”. As a result, engagement is also evolving, becoming more structured and, where necessary, more assertive in holding companies to account.

Our three “uncomfortable” truths

1. Scope 3 is still the weakest link

Across sectors, the most material emissions remain the least well managed, particularly in oil & gas, mining and transport.

2. Governance is slipping at the wrong time

The removal or weakening of climate-linked incentives is undermining delivery just as implementation risks are rising.

3. Regulation is shaping progress, but not always consistently

Disclosure standards are being strengthened across sectors, although at different rates, however this is introducing complexity that can affect the pace, quality or continuity of reporting.

Royal London Asset Management engages with companies as part of its responsible investment and stewardship strategy, aiming to drive long-term value for clients while promoting sustainable business practices. 

Our voting, engagement and advocacy activities are designed to be pragmatic, informed by research, evolving market insights and local best practices, and aligned with the long-term interests of our clients. These activities aim to enhance the value and integrity of our investment decisions. 

Please note that voting and engagement practices may not apply uniformly across all Royal London Asset Management funds or strategies, as each have distinct investment objectives. Please refer to the investment documents for specific details. 

For professional investors and qualified investors only.  This material is not suitable for a retail audience. Capital at risk. This is a financial promotion and is not investment advice. Past performance is not a guide to future performance.

The value of investments and any income from them may go down as well as up and is not guaranteed. Investors may not get back the amount invested. The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change. Forward looking statements are subject to certain risks and uncertainties. Actual outcomes may be materially different from those expressed or implied.