Most climate risk models assume corporate emissions remain unchanged over time.

In this episode, we examine how incorporating Science-Based Targets (SBTi) into forward-looking emissions trajectories changes projected transition risk.

Drawing on new research, we discuss how more than 4,000 matched absolute targets are converted into emissions glide paths and integrated into a scenario-based risk framework. By recalculating Transition Value at Risk (TVaR), emissions reduction requirements, and temperature alignment under both constant-emissions and target-achieved pathways, the analysis quantifies how much risk may be reduced if companies deliver on their commitments.

The results generally show reduced projected TVaR and improved temperature outcomes, while also highlighting where additional decarbonisation is required under more ambitious IPCC and NGFS scenarios.

For institutional investors, this provides a structured way to compare business-as-usual assumptions with conditional target achievement and to assess how portfolio-level transition risk evolves when corporate commitments are incorporated.

Access the full white paper for detailed methodology and analytical applications.

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