While financing for energy solutions such as low-carbon electricity, buildings, and transport has increased, historic rising energy demand has collided with demands for speed, affordability, and energy security. Financial institutions have an opportunity to capture new value and manage emerging risks from climate change. Transition finance can help direct capital to where it is needed to transform critical high-emitting sectors, build resilience and flexibility, and support clients and companies to capture the opportunities of the energy transition.
Financial institutions have signaled their commitment to the energy transition, whether through net-zero targets or broader climate strategies. This reflects both the urgency and the opportunity to align with long-term market trends. Yet, turning these commitments into actions remains a significant challenge.
Corporate Transition Intelligence enables financial institutions to understand companies' transition plans, their real-world feasibility, and the challenges and opportunities that shape their path forward.
This resource hub provides more clarity and information about transition finance and corporate transition intelligence. This includes thought leadership, practical guidance, insights on frequently asked questions, and case studies to highlight lessons learned from previous transactions. Easy access to market-leading frameworks, taxonomies, and reports can help remove barriers to deploying transition capital. Financial institutions can then design and deploy capital with the scale, speed, and integrity required to support the rapid decarbonization of the global economy.
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Financial institutions need to understand how companies are exposed to transition risk and opportunity, moving beyond checklists and static scores to assess whether client transition plans are ambitious and feasible, and what technologies, policies, and market factors they depend on to succeed.
Corporate Transition Intelligence enables banks, investors, and insurers to:
Creating transition intelligence by enhancing corporate transition assessment for financial decision-making
Identifying pathways to inform transition intelligence for financial institutions
Using regional pathways and data sources to assess corporate transition plans in the context of local market, policy, and infrastructure conditions.
Corporate transition assessments can be transformed into tools for delivering transition intelligence with three key innovations.
RMI's new transition pathways tools will help financial institutions gain deep, decision-ready intelligence on the energy transition to stay competitive and manage risk.
Gaining deep corporate transition intelligence is not easy. The impacts of the energy transition vary widely across sectors and geographies, shaped by economic conditions, supporting infrastructure, and policy environments. While the energy transition will touch nearly all companies, the pace and feasibility of change will look very different depending on these factors.
One key tool financial institutions have employed to make sense of this complexity is through leveraging transition pathways — forward-looking descriptions of how sectors or regions might evolve under different scenarios — to support company-level assessments.
To make this process easier, RMI is piloting a transition pathway repository. The repository allows users to extract the pathway data they need to contextualize a company's transition goals and plans. Each pathway has been categorized according to standardized parameters to make pathway interpretation, comparison, and selection as simple as possible.
The first version of this tool focuses on Southeast Asia's power sector. Future releases will cover additional regions and industries.
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How a bank would assess an industrial original equipment manufacturer (OEM) that enables wider automotive sector transition
The “transition finance nexus” connects transition pathways, transition plans & planning, transition assessment, and transition finance.
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Investment alignment is central to the evolution of transition assessments because it links a company’s plan to what it is actually investing in. By understanding where a company’s investment activity diverges from its transition objectives, financial institutions can pinpoint where to target engagement, develop innovative transition finance products, and allocate capital. This guide provides step-by-step instructions for financial institutions to calculate the alignment of a company’s investment pipeline to relevant benchmarks on a forward-looking basis. The approach focuses on translating asset-level project data into forward-looking emissions and production trajectories, comparing those trajectories with credible transition pathways and company targets, and identifying areas of misalignment.
Cordova, Alaska from the air showing harbor and mountains.
Transition footprint mapping is the process of assessing a company’s assets, activities, and geographic operations to understand where its business is most exposed to the energy transition — and where that exposure warrants further evaluation. This guide provides practical, step-by-step guidance for financial institutions (FIs) on how to conduct transition footprint mapping for corporates across sectors and regions. It is intended to help FIs integrate asset-level analysis into their corporate transition assessments, enabling more granular and useful transition intelligence.
Transition finance is emerging as a core concept for financial institutions seeking to align portfolios and business strategies with net zero goals. This guide offers financial institutions critical information for deciding how to design a transition finance approach that meets their needs by outlining key design questions and summarizing the advantages and trade-offs of different approaches currently seen in the market. Relevant resources and examples are included to help provide additional context and support financial institutions seeking to build upon existing guidance in the market.
This how-to guide describes steps to develop internal capacity to develop and execute a transition finance strategy. It offers a roadmap for financial institutions and can be used regardless of where a financial institution is on their journey, from exploring transition finance, beginning strategy development, or considering how to improve their existing strategy execution and set up employees for success.
This guide focuses primarily on two of the key steps in moving from from institution-level transition finance strategy to implementation: Identify Priority Sectors and Understand the Sector-Level Levers of Transition.
Climate & Capital
TIME Magazine
Financial Times
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