Financing the transition to net zero in high-emitting sectors

Transition Finance

What is Transition Finance

Transition finance refers to capital investments that support high-emitting companies and sectors in reducing their greenhouse gas emissions in line with scientifically grounded pathways. Rather than focusing only on already “green” companies, transition finance enables real-world decarbonization by funding credible, measurable progress toward net zero.

This includes financing companies in sectors like energy, transport, manufacturing, and real estate that are essential to the global economy — but need to transform significantly to align with climate goals.

Why Transition Finance

To meet global net zero goals, emissions need to be cut across all sectors — not just those already considered green. Today, so-called hard-to-abate sectors — including heavy industry, transport, power generation, and real estate — are responsible for over 70% of global greenhouse gas emissions.

At the same time, the case for transition finance isn’t only environmental — it’s economic. Companies with credible and science-aligned transition plans are demonstrating greater resilience and competitiveness. They are reducing energy costs through improved efficiency, gaining access to new markets and customers, and increasingly attracting long-term capital from sustainability-conscious investors. These businesses are also better positioned to weather regulatory shifts, adapt to tightening climate policies, and avoid reputational risks tied to emissions exposure. In this context, transition finance is not just about risk mitigation — it's about financing a more stable, forward-looking economy.

Hard-to-abate sectors

>70%

Hard-to-abate sectors contribute over 70% of global GHG emissions.

Investment gap

USD 4.5 trn

To meet net zero emissions by 2050, investments in clean energy need to reach USD 4.5 trillion per year by 2030.

Climate targets

-43%

To align with the Paris Agreement's goal of limiting global warming to 1.5°C above pre-industrial levels, global greenhouse gas emissions must peak before 2025 and decline by 43% by 2030.

Our approach to Transition Finance

Interdisciplinary Team

The transition to net zero is complex — and demands expertise from multiple fields. That’s why we’ve built a cross-functional team combining:

  • Climate impact specialists who assess sectoral decarbonization pathways

  • Impact and ESG experts who validate data integrity and sustainability claims

  • Investment professionals who understand credit risk, portfolio design, and fixed income markets.

Climate Transition Scoring Methodology

Together, we’ve developed a proprietary Climate Transition Scoring (CTS) methodology: a rigorous, science-based framework used to evaluate the decarbonization potential of corporate bond issuers across five dimensions.

5 Dimensions of responsAbility's ClimateTransition Scoring Methodology

This scoring methodology is both data-driven and expert-led, drawing on over 150 quantitative indicators from sources like CDP and the Science Based Targets initiative (SBTi), and refined through qualitative review by our climate impact specialists. Analysts validate and contextualize each score to account for data gaps, outliers, or overlooked trends, ensuring a comprehensive and credible evaluation of each issuer’s climate transition pathway.

Engagement

Our commitment to impact doesn’t stop with portfolio construction. Engagement is central to how we drive change. We regularly participate in collective initiatives such as CDP’s Non-Disclosure Campaign to improve environmental transparency across markets. In parallel, we engage directly with portfolio companies to clarify decarbonization strategies, address gaps in emissions reporting, and encourage stronger, science-based target setting. By maintaining an active dialogue and clearly communicating our expectations, we aim to help issuers progress faster and more credibly on their path to net zero.

Meet our Team

Profile photo of team member Dr. Stephanie Bilo

Dr. Stephanie Bilo

Chief Client & Investment Solutions Officer and Member of the Executive Management

View profile
Profile photo of team member Jeremy Sitruk

Jeremy Sitruk

Head of Portfolio Strategy

View profile
Profile photo of team member Ewout van der Molen

Ewout van der Molen

Head of Climate Finance

View profile
Profile photo of team member Maria Yetano Roche

Maria Yetano Roche

Head of Climate Impact

View on LinkedIn
Profile photo of team member Christine Bürgi

Christine Bürgi

Climate Impact Analyst

View on LinkedIn
Profile photo of team member Paolo Rossi

Paolo Rossi

Investor Relations & Business Development Senior Director

View profile
Profile photo of team member Jennifer Kehl

Jennifer Kehl

Investor Relations & Business Developer

View profile

Latest Insights on Transition Finance