Navigating corporate transitions: a tool for financial institutions

The Climate Bonds Initiative presents a tool for financial institutions to classify corporate transition maturity into five categories: No action, Committed, Aligning, Aligned, and Net zero. The system uses specific indicators across five components—Commitment, Emissions Targets, Delivery Strategy, Governance, and Performance—to determine a corporate's status. It distinguishes between 'short-term+' and 'full-term' plans within the 'Aligning' category and allows 'Climate Solutions' to be categorised as 'Aligned' for a limited period. The guide also provides a weighted-average methodology for corporates with multiple business activities and suggests that financing for corporates in the 'Aligning' and 'Aligned' categories can be considered 'transition finance'.

• The proposed classification system categorises corporate transition maturity into five primary levels: '1. No action', '2. Committed', '3. Aligning', '4. Aligned', and '5. Net zero'.
• Assessment of a corporate's transition is based on 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 account for corporates that may lack medium- and long-term targets but demonstrate forward-thinking and short-term action.
• Corporates providing 'Climate Solutions' or 'Enabling Activities' can be categorised 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 classified as '3. Aligning' or '4. Aligned' is determined to be 'transition finance', regardless of the sector, including those in hard-to-abate sectors.
• For corporates with multiple business activities, the document proposes a three-step methodology: assigning point scores to categories, assessing each activity separately, and calculating a weighted-average score based on revenue or emissions share.
• To be classified in a specific category, a corporate or business activity must meet all associated indicators, as no weighting is applied to individual indicators.
• The system allows for downward recategorisation if a corporate fails to maintain indicators, such as failing to develop a transition plan within the five-year window for 'Climate Solutions' or missing delivery milestones.

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} }