The world’s most carbon-intensive firms are gradually reducing their emissions, but are providing investors with little insight on their paths to net zero, especially around capital expenditure, according to a Climate Action 100+.

The investor-led initiative’s sixth Net Zero Company Benchmark – which assessed 164 of the world’s most carbon-intensive firms – found that 69% of companies had reduced their absolute Scope 1 and 2 emissions in the past three years. Only 32% of companies had reduced their emissions intensity in line with credible 1.5°C benchmarks for their sector in the past three years.

In terms of reporting, 8% of companies are disclosing credible transition plans for meeting their own medium- and long-term greenhouse gas (GHG) reduction targets, the analysis found. “However, large reporting gaps remain on how companies are allocating capital to the implementation of their decarbonisation plans,” is said.

The majority of companies assessed continue to set medium- (85%) and long-term (80%) GHG reduction targets. However, fewer set short-term targets, with 41% of companies setting a short-term GHG reduction target in 2025, a slight decrease from last year. Six more companies than last year now have short-term targets aligned with credible 1.5°C benchmarks for their sectors.

“Companies need to be clearer on how they choose to allocate capital to decarbonisation, set near-term as well as longer-term targets, and align policy engagement with their climate ambitions,” said Tamsin Ballard, Chief Investor Initiatives Officer, UN Principles for Responsible Investment .

The benchmark’s climate accounting and audit assessment – which tracks whether the material impacts of climate risks and company targets are adequately disclosed to inform investors’ capital allocation and stewardship decisions – showed “little year-on-year change”.

More than 600 investors use to Climate Action 100+ to engage the world’s largest corporate GHG emitters to encourage action on climate change to mitigate financial risk and maximise the long-term value of assets.

Support for the Asset Owner Statement on Climate Stewardship, which outlines expectations across the investment sector, now tops US$2 trillion, following the addition of eight signatories since its launch in February.

The new signatories are: Caisse des Dépôts (CDC), IRCANTEC, Établissement de Retraite Additionnelle de la Fonction Publique, (ERAPF), Fonds de Réserve pour les Retraites (FRR), Mutuelle assurance des instituteurs de France (MAIF), Malakoff Humanis, Sammelstiftung Vita, and the United Nations Joint Staff Pension Fund (UNJSPF).

Launched with support of 26 asset owners worth US$1.5 trillion, the statement sets out clear and consistent expectations regarding climate stewardship, seeking to embed greater efficiencies into the stewardship chain, thus “empowering asset manager stewardship teams to deliver on their asset owner climate objectives” as part of their mandates.

Pierre Devichi, Head of Responsible Investment at ERAFP, which provides pensions for civil servants in France, said climate change is a key risk to long-term financial returns and called on asset managers to enhance their climate stewardship activities.

“Studies and experience have shown that stewardship activities – namely voting and engagement – are essential tools to influence the real economy towards decarbonation,” he said.

“ERAFP wants to highlight best practices and clearly set its expectations, aligned with those of many peers, to prompt asset managers to significantly bolster their action in this critical component of sustainable investing in order to effectively serve asset owners’ needs – and ultimately, those of beneficiaries.”

The statement was co-authored by Leanne Clements, Head of Responsible Investment for People’s Partnership, Vaishnavi Ravishankar, Head of Stewardship at Brunel Pension Partnership and Shipra Gupta, Investment Stewardship Lead at Scottish Widows.

“Asset owners continuing to set the bar on climate expectations, especially in this challenging external landscape, is extremely critical in the lead up to 2030, for the ultimate benefit of its members,” said Clements.

Separately, an analysis of 180 portfolios across the six largest pension fund systems globally – the Netherlands, UK, US, Canada, Australia, and Switzerland – warned that an unsuccessful transition to a net zero economy could wipe a third off returns to beneficiaries.

Investment solutions provider Ortec Finance said a failed low-carbon transition could wipe 33% off pension fund returns worldwide by 2050 in a climate scenario that tracks the current trajectory of global warming, due to “dual headwinds of shrinking growth and rising inflation”.

An assessment of the proxy voting guidelines of US public pension funds by environmental group Sierra Club has awarded its only A ranking to the New York State Common Retirement Fund. 

Sierra Club, which had previously rated US public pension funds in its annual ’Hidden Risk in State Pensions’ report, released the analysis in its new interactive tracker, which will be updated regularly as pensions change their guidelines or publish new information. 

The tracker analyses the proxy voting guidelines, proxy voting records, and voting transparency of 32 of the largest US public pension funds, which collectively represent more than US$3.8 trillion AUM. The scope includes state pension funds, county and city pension funds, including pension funds located in states restricting ESG investing through legislation and executive actions.

Sierra Club said New York State Common Retirement Fund had ‘strong’ voting guidelines across systemic risk, climate-related director votes, climate-related shareholder resolutions, climate lobbying and political contributions, and nature-related votes. 

Five funds were ranked B for the proxy voting guidelines: Connecticut Retirement Plans and Trust Funds; Massachusetts Pension Reserves Investment Management; New York City Public Pension Funds; California Public Employees’ Retirement System; and Vermont Pension Investment Commission.  

Since the publication of its latest annual report in February 2025, Sierra Club said only Vermont had “significantly” increased the ambition of its climate-related proxy voting guidelines.

Pension staff and boards typically recommend updates to their proxy voting guidelines based on outcomes from engagement during corporate shareholder meetings earlier in the year. So far in 2025, six public pensions have updated their proxy voting guidelines or investment policies: Colorado Public Employees’ Retirement Association, Ohio Public Employees Retirement System, Indiana Public Retirement System, the Public School Retirement System of Missouri, Virginia Retirement System, and Vermont. 

The tracker also references where pensions have adopted the latest guidelines of their proxy advisors. 

“To protect their portfolios, public pensions must advocate for corporate climate action guided by credible and measurable strategies. Disclosure is not enough — any strategy that does not push for real-world emissions reductions and robust protections for nature, workers, and communities falls short,” said Allie Lindstrom, Senior Strategist with the Sierra Club’s Sustainable Finance campaign.

The Church of England Pensions Board (CoEPB) has outlined responsible investment priorities for the next decade which take account of “an increasingly volatile world”, responding to domestic and global pressures on investors.

CoEPB, responsible for £3.4 billion (US$4.57 billion) in assets, listed five “ambitious priorities” intended to put it “at the forefront of responsible and ethical investment” in its 2024 Stewardship Report.

The five priorities that will shape CoEPB’s approach to responsible investment are: supporting ethical and responsible markets; tackling global systemic risks, strengthening the scheme’s home UK market; supporting peacebuilding and respect for human rights; and delivering real-world impact through investment and stewardship.

On systemic risks, CoEPB said it would focus in particular on the energy, food and mining sectors, working with other asset owners to understand the implications for investments and identify steps to address these.

The CoEPB also said it would address growing forms of conflict and challenges to human rights, “recognising the unique presence and role of the Anglican church in regions afflicted by conflict”.

To implement new priorities, the CoEPB announced new responsibilities for several members of its responsible investment team. Chief Responsible Investment Officer Adam Matthews, for example, has been appointed to the honorary role of the Special Envoy for Peacebuilding for the Archbishop of Cape Town and Co-chair of the Board of the Global Centre for Peacebuilding and Business.

“With increasing trends of protectionism, combined with a weakening of global institutions and international agreements the global rules-based system is under considerable challenge,” said Matthews.

“As a pension fund we are uniquely placed to consider longer time horizons, the systemic nature of the risks we face – and how we can respond to them in the interests of our members.”

According to a 2024 survey of 2,500 scheme members, 89% said they expected the CoEPB to be a leader in ethical and responsible investment and 93% expect it to invest with the long term in mind to deliver pension promises.