Business momentum on climate action builds, as Climate Week NYC approaches
Here’s a basic truth: It never pays to tell markets what they should focus on. In the end, markets price in risks, seize opportunities and reflect asset values — on their own terms.
As Climate Week NYC approaches, it’s clear that that’s exactly what’s happening with private sector action on climate change.
Wall Street analysts are scrutinizing climate risk in their reports. Global markets, alongside regulators like the U.S. Securities and Exchange Commission, are adopting mandatory disclosure. The world’s largest investors and companies are no longer just evaluating these risks — they’re reshaping their portfolios and operations to ensure against the escalating dangers of a warming planet, water scarcity and nature loss.
Climate risk is no different from inflation risks or currency risks now. And investors, companies, regulators, and policymakers now have the models and the language for analyzing and acting on them.
It’s just common sense. Droughts, floods, and unpredictable weather patterns are reducing agricultural yields, disrupting global supply chains, and causing insurers to retreat from disaster-prone housing markets. Financial markets and businesses are right to focus on these threats that can undermine profits and destabilize economies.
But where there’s risk, there’s also immense opportunity.
Investors and businesses are capitalizing on the innovations and lucrative solutions emerging from the effort to address climate challenges including biodiversity loss and water availability — just as they have with every major risk before.
And they’re embracing the opportunities presented by historic clean energy and climate investments and incentives, driving economic growth and creating hundreds of thousands of jobs — all while strengthening community resilience.
Companies are pouring billions into breakthrough solutions, from candy giant Mars’ investments in sustainable agriculture to Siemens’ push to modernize the grid. The result is transformational: The economics of clean energy have improved so rapidly that nearly all the new power plants being built in the U.S. are carbon-free. In five years, electric vehicle sales have gone from niche to mainstream, despite the inevitable growing pains of any emerging industry.
And capital is pouring into climate finance across the financial system. The five biggest U.S. banks have committed more than $5 trillion to sustainable financing by 2030. Sustainable bonds issuances are expected to top $1 trillion this year. California Public Employees’ Retirement System (CalPERS), the largest public pension fund in the U.S. managing $500 billion, late last year doubled the amount it’s investing in climate solutions to $100 billion.
And BlackRock? The world’s largest asset manager is now the leading player in the fast-growing transition finance space, partnering with some of the biggest carbon polluters to help them reduce their emissions.
Through deeds and words, the market is signaling a clear direction for the future.
A striking financial consensus
Ask investors or companies if climate is critical to business performance, and they say yes, in survey after survey, regardless of political affiliation.
A recent poll of 1,000 investors underscores this growing consensus: A striking 77 percent of investors — including 61 percent of Republicans — agreed that companies prioritizing environmental responsibility are more likely to thrive financially. Just as telling, 70 percent believe that “there is a lot of money to be made in the clean energy transition” — an opportunity that investors said will outpace every other investment outside of artificial intelligence in the short and long run.
These responses aren’t just a reflection of changing attitudes — they’re the signal of real, actionable priorities in the financial and corporate world. This shift is now driving a sharp focus on transition planning, with investors and companies actively mapping out goals, actions and oversight mechanisms to address climate financial risks and seize emerging business opportunities. Propelling this is the continuing momentum in companies and investors setting net-zero commitments and adopting the climate transition action plans needed to achieve them.
The result is that the world’s leading companies, including General Mills, HSBC, National Grid and PG&E, are laying out strong transition planning practices. And our recent analysis of the 48 largest North American investors managing $60 trillion in assets, including AllianceBernstein and New York State Common Retirement Fund, shows that nearly 80 percent of these top investors have made concrete commitments to eliminate carbon pollution from their portfolios, and close to 90 percent already have significant elements of their climate action plans in place.
These plans aren’t just ticking boxes — they represent strategic, long-term roadmaps. They demonstrate how investors are engaging with companies and how both are advocating for the innovative policies necessary to achieve their climate goals.
Continued need to move forward faster
Still, while the private sector is finally reckoning with the risks it faces, it needs to act more boldly and ambitiously. We’re dangerously off course to limit global temperature rise and the window to act is closing fast. Extreme weather events are not just disrupting business — $1 billion disasters are now occuring every 18 days on average, shattering lives and devastating communities. Our planet, quite simply, is reaching a tipping point.
The private sector must double down and urgently ramp up investments, scale transformative solutions and capitalize on opportunities even more. Just as critically, businesses and investors must demand — and help implement — bold, systemic change. That means continuing to champion strong, enforceable federal policies like the Inflation Reduction Act. And treating strong climate action plans with clear, accountable, and time-bound steps as a critical mandate to success, not an option.
The path forward is not just clear — it’s imperative. Investors and companies hold the power to reshape the global economy, and with every investment and policy push, they’re building a future where both people and the planet can thrive. The time to act is now. The stakes are too high, and the rewards too great to delay.
