Kontakt MyFidelity Logout
Skip Header

Corporate action

Only a few companies are on track for net zero

Net Zero 2050: to achieve this, company efforts are crucial. But only 2% of companies in our coverage are currently achieving or enabling net zero. Is all lost then? Maybe not – as long as companies in high emission really exert themselves.

What happened in 2022? 

Since the inaugural instalment of the Fidelity Climate Ratings in 2021, the coverage has been extended from 1,600 to more than 2,000 companies. The methodology is comparable to the previous set with the addition of a minimum criteria related to climate lobbying.


  • In the total sample, only 2% of companies in our coverage are currently achieving or enabling net zero (Chart 1), with the majority of companies in this category represented by utilities, materials and industrials, sectors accounting for around 38% of global emissions (Chart 2).
  • 5% of companies are aligning to a net zero pathway, with a sector skew towards consumer discretionary, staples, IT and communication services, in total accounting for just under 20% of global emissions.

In terms of global distribution:

  • EMEA and North American companies dominate both categories at the top - achieving or enabling net zero and aligning to net zero (Chart 2).

  • Asia and South America perform poorly. Companies in both regions overwhelmingly show low or no evidence of transition potential. 

  • Australia and Oceania see the highest proportion of companies falling within the high or low transition categories. 

Most companies continue to set targets and take measures to somewhat mitigate their impact on climate change but are struggling to align their activities to a net zero path.


Defining scenario thresholds for corporate action

To achieve net zero, at least 90% of companies in our coverage should be either achieving or enabling net zero or aligning to a net zero pathway by 2050. This means that around half of all companies in each category should be moving up the rating every five years. While this transition is unlikely to be linear, modelling it in this simple framework gives us a sense of the required speed and magnitude of change between now and 2050 (Chart 3). 

Given the low starting base, this pace may well be achievable in the next decade, but it will become increasingly ambitious over time and highly contingent on the progress in other areas we are tracking - technology and policy action.


We assume that under current policies this transition would happen at a slower speed, which leads to only a third of companies positioned in the top two categories by 2050 (Chart 4). In terms of pace, this means around 10% of companies in each category should be transitioning to a higher rating every five years - not such a tall order overall, but without support from other transition enablers even this pace could become increasingly challenging in the latter part of the horizon.


Under the NGFS “Disorderly Transition” scenario, we assume corporate transition to higher climate ratings evolves slowly until 2030. After that, companies must move fast to catch up, meaning about two-thirds of companies in each category should be improving their rating every five years, ending up with over 90% of companies rated in the top two categories by 2050 (Chart 5). This is certainly a challenging pace which only seems achievable with significant breakthroughs in technology and game-changing policy action at national and international levels. With that in mind, a more feasible scenario would be a “Delayed Transition” where the temperature increase is capped only at 2°C.


Given our company sample is not equally distributed across sectors, with a third in financials and industrials, we also look at corporate action projections on an emission-adjusted basis. This shifts sector weights significantly away from financials, IT and healthcare towards industrials, consumer discretionary and consumer staples. Financials and healthcare tend to be over-represented in lower climate ratings (low or no evidence of transition potential). So reducing their weights lowers the bar for the overall net zero transition. For instance, if the pace of transition within these two sectors is halved, while that for other sectors remains the same, we could still get 90% of companies on an emission-weighted basis rated in the top two categories by 2050.

Summary: focusing on high emitters may be sufficient for Net Zero goal

The Net Zero 2050 scenario can be within reach – as long as companies in high emission sectors achieve or align to a net zero pathway at the appropriate pace and provided other transition enablers are supportive. Of course we want to see companies across all sectors moving up the climate ratings and those who fall behind would likely be penalised by investors. For the purposes of tracking corporate action and mapping it onto climate scenarios, focusing on high emitters may well be sufficient for gauging the base case pathway.


Important information 

This is a marketing communication. This information must not be reproduced or circulated without prior permission. This information is intended for professional clients only and not a suitable basis for the general public or private investors.

Fidelity only offers information on products and services and does not provide investment advice based on individual circumstances, other than when specifically stipulated by an appropriately authorised firm, in a formal communication with the client.

Fidelity International refers to the group of companies which form the global investment management organisation that provides information on products and services in designated jurisdictions outside of North America. This communication is not directed at and must not be acted upon by persons inside the United States and is otherwise only directed at persons residing in jurisdictions where the relevant funds are authorised for distribution or where no such authorisation is required. It is your responsibility to ensure that any service, security, investment, fund or product outlined is available in your jurisdiction before any approach is made to Fidelity International. 

Unless otherwise stated all products and services are provided by Fidelity International, and all views expressed are those of Fidelity International. Fidelity, Fidelity International, the Fidelity International logo and F symbol are registered trademarks of FIL Limited. 

This material may contain materials from third parties which are supplied by companies that are not affiliated with any Fidelity entity (Third-Party Content). Fidelity has not been involved in the preparation, adoption or editing of such third-party materials and does not explicitly or implicitly endorse or approve such content. Fidelity International is not responsible for any errors or omissions relating to specific information provided by third parties.

For German Wholesale clients issued by FIL Investment Services GmbH, Kastanienhöhe 1, 61476 Kronberg im Taunus. 

For German Institutional clients issued by FIL (Luxembourg) S.A., 2a, rue Albert Borschette BP 2174 L-1021 Luxembourg. 

For German Pension clients issued by FIL Finance Services GmbH, Kastanienhöhe 1, 61476 Kronberg im Taunus. 

Investors/ potential investors can obtain information on their respective rights regarding complaints and litigation in English here: Complaints handling policy (fidelity.lu) and in German here: Beschwerdemanagement (fidelity.de).

The information above includes disclosure requirements of the fund’s management company according to Regulation (EU) 2019/1156.    

Unless stated differently, information dated as of February 2023.