Navigating corporate transitions: a tool for financial institutions

This guide by the Climate Bonds Initiative proposes a standardized classification system for financial institutions to assess and categorize the transition maturity, ambition, and credibility of their corporate exposures. The tool aims to help banks and investors manage transition risks and align their portfolios with net-zero goals by providing a consistent methodology to track corporate progress from initial commitment to full net-zero alignment.

• The proposed classification system categorizes corporate decarbonization transition maturity into five primary levels: '1. No action', '2. Committed', '3. Aligning', '4. Aligned', and '5. Net zero'.
• To determine a corporate's category, the system evaluates five key components: Commitment, Emissions Targets, Delivery Strategy, Governance, and Performance.
• The 'Aligning' category is subdivided into '3a. Aligning – short-term+ plan' and '3b. Aligning – full-term plan' to recognize corporates that have robust short-term targets and a strategy for future reductions even if they lack full medium- and long-term targets.
• Corporates providing 'Climate Solutions' or 'Enabling Activities' can be categorized as '4. Aligned' based on current emissions performance even without a formal transition plan, but this status is limited to a five-year period.
• General purpose financing for corporates categorized as '3. Aligning' or '4. Aligned' is considered 'transition finance' based on the credibility and ambition of the corporate's transition, regardless of the sector.
• The system requires that a corporate must meet all indicators for a specific category to be classified within it, with no weighting applied between different indicators.
• For corporates with multiple business activities, the guide proposes a weighted-average scoring methodology based on either revenue or emissions share to determine an overall corporate category.
• The guide recommends that financial institutions perform annual reassessments of corporate exposures to ensure classifications remain current, focusing on interim actions and targets in non-reset years.
• Corporates can be reclassified downwards if they fail to meet previously satisfied indicators, such as missing delivery milestones or failing to develop a transition plan within the five-year window for 'Climate Solutions'.

APA

Creed, A. (2024). Navigating corporate transitions: a tool for financial institutions. Climate Bonds Initiative. https://www.climatebonds.net/files/documents/publications/cbi_navcorptran_03b.pdf

Chicago

Creed, Anna. Navigating corporate transitions: a tool for financial institutions. Climate Bonds Initiative, 2024. https://www.climatebonds.net/files/documents/publications/cbi_navcorptran_03b.pdf.

Wikipedia

{{cite report |last1=Creed |first1=Anna |title=Navigating corporate transitions: a tool for financial institutions |publisher=Climate Bonds Initiative |date=May 2024 |url=https://www.climatebonds.net/files/documents/publications/cbi_navcorptran_03b.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{creed2024navigating, author = {Creed, Anna}, title = {{Navigating corporate transitions: a tool for financial institutions}}, institution = {Climate Bonds Initiative}, year = {2024}, month = may, url = {https://www.climatebonds.net/files/documents/publications/cbi_navcorptran_03b.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }