Businesses are now finding that their future competitiveness is tied to how well they plan for a low-carbon world.
South Pole’s 2025 Net Zero Report focuses on financial institutions as they act as a powerful lever for climate action. By choosing where capital flows, they help decide which business models thrive and which technologies scale. Their evolving expectations are sending clear signals to the real economy, including large, global companies that operate within a financial system that is shifting toward resilience and responsibility.
So, what do these shifts mean for your business? This blog unpacks four key findings from the report and explores how your climate strategy — or lack thereof — could influence your reputation, competitiveness and long-term success.
Join our live webinar on the 13th of May where we will dive into key net zero progress insights with in-house experts and speak to clients from the industry.
The webinar will include reflections on the report findings, real-world examples and discussions on how financial institutions are driving the climate transition.
The global shift to net zero is progressing, but the pace varies dramatically between sectors and geographies. While some companies are forging ahead, others are lagging behind, creating exposure to transition risk and reputational harm. Our report found that:
Climate action is no longer optional — it's becoming a business norm and standard practice risk management. As finance shifts towards decarbonisation, companies are under growing scrutiny to demonstrate alignment with net zero pathways. Without a clear plan, companies risk losing access to favourable financing, partnerships, and market positioning.
Develop and communicate a tailored, science-aligned climate transition plan. This isn't just about compliance — it's about securing future relevance and resilience in a low-carbon economy. It's a signal to investors that your company has a plan to manage the physical and transition risks of achieving net zero.
Financial institutions report that progress to reach net zero targets is being hampered by the slow pace of decarbonisation by the companies they finance, highlighting the interconnected nature of the climate transition.
Our report found that financial institutions are increasingly prioritising companies with credible climate strategies:
Your climate strategy is becoming a key lever for business development and competitiveness, influencing who wants to partner with you, buy from you, or procure your services.
Build climate credibility through clear transition plans and smart use of tools like high-integrity carbon credits. These signals build trust with suppliers, customers, and collaborators.
Rather than walking away from high-emitting sectors, financial actors are choosing to stay engaged and push for change. Our report found that:
Companies are now expected to have a plan and show progress. Engagement is shifting from general climate commitments to deeper scrutiny of implementation. There is a growing expectation for full transparency.
Be proactive. Anticipate tough climate-related questions and establish robust internal processes for tracking, reporting, and updating your climate strategy over time.
Despite increasing action, many financial institutions are now more cautious about what they publicly disclose. This shift is in response to regulatory ambiguity and backlash against greenwashing.
You don't need perfect data to start communicating. Investors want to see progress, not perfection. A lack of disclosure can signal a lack of readiness.
Stay ahead of regulatory shifts and make sure your climate disclosures reflect both ambition and credibility. Avoid overclaiming, but don't undercommunicate genuine progress.
The message from financial institutions is clear: climate risk is financial risk, and companies that fail to respond are becoming harder to back, insure, or do business with.
Investors and banks aren't waiting for mandates. They're proactively integrating climate into decision-making, shifting portfolios toward low-carbon opportunities, and safeguarding long-term financial stability. Increasingly, access to capital, reputation, and even market position depend on how convincingly companies can show they're part of the solution.
In short, future-ready companies are those that act now, aligning with where capital is going, not where it's been. The net zero transition may be complex, but it's increasingly becoming a business necessity
Join our live webinar on the 13th of May where we will dive into key net zero progress insights with in-house experts and speak to clients from the industry.
The webinar will include reflections on the report findings, real-world examples and discussions on how financial institutions are driving the climate transition.
Ready to strengthen your climate resilience and transition to net zero? Contact us today to develop a tailored strategy that drives long-term success and aligns with global climate goals.
