For those concerned about the threats to the world from climate change, some of the signals this year from institutional investors and investment banks are alarming. However, there are still reasons to be hopeful about the resilience of efforts to tackle environmental issues at the corporate level.
It is true that there has been a notable backing away from climate commitments by banks this year. In the US, for example, Goldman Sachs, Citibank, Wells Fargo, JPMorgan Chase, and Morgan Stanley have all dropped out of the Net-Zero Banking Alliance, a group of banks bound by a pledge to reduce carbon emissions linked to their financing. In Europe, HSBC, Barclays, and UBS have also left the group, while UBS and HSBC have additionally pushed back targets to decarbonise their operations.
There have also been pullbacks in the investment world, with the Net Zero Asset Managers Alliance suspending operations. In the US, such shifts have been driven by pressure from the current Trump administration, including the threat of antitrust lawsuits against large financial companies who joined green alliances. More globally, concerns are mounting over the potential impact of climate commitments on economic growth.
Nevertheless, when examining data on carbon emissions reporting, ESG metrics, and sustainable investment flows, we can see significant increases in recent years. Public companies that disclose their carbon footprint are motivated to avoid the embarrassment of reporting higher emission levels each year.
The number of companies reporting on climate change has grown dramatically over the past decade. According to the Carbon Disclosure Project, that number rose from 4,968 in 2014 to 8,361 in 2019, and to more than 22,400 in 2024.
Similarly, in regulatory filings, US public companies continue to discuss climate risks affecting their business and their progress in reducing carbon emissions. In particular, the number of firms that mentioned the acronym ESG — referring to environmental, social, and governance issues — in their annual 10-K filings for the 2024 fiscal year was 30 per cent. Mentions of climate change appeared in 47 per cent, and sustainability in 52 per cent of filings.
At the same time, more asset managers are using ESG data as part of their evaluation of portfolio companies. This trend is reflected in the rising revenues of ESG data providers over the past decade — from $245 million in 2016, to $525 million in 2020, and to $1.56 billion in 2024, according to Opimas.
For example, MSCI grew sales of ESG and climate data from $357 million in 2024 to an annualised rate of $384 million in the first half of 2025. Roughly one-third of this revenue comes from the US. Notably, 48 of the world’s 50 largest asset managers now incorporate MSCI’s ESG and climate data into their investment processes.
More directly, the assets held by global sustainability funds have risen significantly over the past decade. According to Morningstar, these funds have grown steadily to $3.5 trillion in the second quarter of 2025.
Probably the most important development in climate reporting over the past few years has been the publication of new reporting standards by the International Sustainability Standards Board (ISSB). In 2023, the ISSB released two key frameworks: IFRS S1, which covers reporting on material sustainability risks, and IFRS S2, which focuses on climate-related disclosures.
This year, the Securities and Exchange Commission (SEC) voted to end its defence of a rule that would have required US companies to report on climate risks. The new chair, Paul Atkins, has criticised the ISSB standards, describing them as driven by “ideologues”. Despite this resistance in the US, 37 jurisdictions have either adopted or plan to adopt the ISSB frameworks. These include a diverse range of countries such as Australia, Bangladesh, Brazil, Chile, Hong Kong, Kenya, Malaysia, Mexico, Nigeria, Pakistan, and Turkey. The standards have also received backing from major international bodies, including the G7, the International Organization of Securities Commissions (IOSCO), and the Financial Stability Board (FSB).
There may yet be some rollbacks. A few companies have begun removing references to climate change from their websites. However, the growing momentum in corporate climate-risk reporting and the widespread integration of ESG data by asset managers over the past decade will not be easily reversed. Efforts to address climate change at both the corporate and investor levels are likely to persist despite shifting political and regulatory winds.
PublishedOct 4 2025 by Finincial Times