In a prior article we discussed the essential role of transition planning in turning corporate climate ambitions into tangible actions. Concurrently, investors are increasingly interested in aligning their portfolios with global decarbonization goals. Within this context, the way investors assess companies’ transition plans has become a critical issue in asset management.

Following the 5th episode of Green Hub TV, Thomas Girard, Global Head of Green & Sustainable Syndicate, and Béatrice Verger, ESG Investment Specialist, both from our Green & Sustainable Hub, provided insights on how investors evaluate corporate transition plans and their influence on investment decision-making.

Between April and September 2025, the Natixis CIB Green and Sustainable Hub conducted a dedicated survey on corporate transition planning. The initiative forms part of a broader research effort to evaluate companies’ transition potential through the design and execution of credible transition plans.

The goal was to understand what elements investors look for in a corporate transition plan, how they use those elements in their analysis, and what challenges they face in doing so.

The survey gathered responses from around 30 European investors – a mix of asset managers and insurance companies – representing more than €8.5 trillion in assets under management. The sample included both large generalist institutions and smaller, specialized boutiques, ensuring a representative view of market practices.

The results reveal that transition planning is now a well-established concept among investors. 80% of respondents consider themselves well-informed on the subject. Most focus on the ambition and alignment of transition plans with credible climate scenarios rather than on exhaustive operational details on the implementation

Another strong signal is the prevalence of proprietary evaluation methods. 65% of investors rely on in-house frameworks to assess corporate transition plans – a level higher than initially anticipated. Among those who do use external references, the Task Force on Climate-related Financial Disclosures (TCFD) and the Carbon Disclosure Project (CDP) remain the most cited.

Interestingly, third-party assessments are rarely used: three-quarters of investors say they rely on them only occasionally or not at all, preferring open-data from nonprofit initiatives such as the Science Based Targets initiative (SBTi) and the Transition Pathway Initiative (TPI).

The survey also found that 60% of respondents already manage transition-themed products, particularly in listed equity strategies following a “best-in-class” approach, investing in companies with the most credible transition plans.

Investors’ expectations are clear: every respondent in the survey expects investee companies to develop a transition plan. More than one-third go further, requesting a plan from companies that have yet to publish one.

However, the absence of a plan does not automatically exclude a company from being considered for investment. No investor that took part in the survey said they would refuse to invest solely because a transition plan is missing.

Industries with high emissions, such as power generation, steel, real estate, and land transport, are under the closest scrutiny. The survey also highlights that whether a company is listed or private plays a bigger role than its size or geography, reflecting the higher disclosure requirements that listed firms already face under European sustainable finance regulations.

For investors, transition plans are more than disclosures – they are practical engagement tools. According to the survey, 85% of respondents use transition plans to engage in dialogue with portfolio companies.

They also serve as inputs for portfolio alignment, risk management, and thematic investing. In some cases, the presence or quality of a transition plan can influence a company’s overall ESG evaluation and ultimately its inclusion in funds classified under SFDR Article 8 or Article 9, or those carrying recognized European ESG labels such as the SRI label.

When evaluating corporate transition plans, investors’ primary focus remains climate impact. Yet many are beginning to incorporate additional dimensions such as the just transition, biodiversity, and climate adaptation and resilience.

The key indicators investors look for include:

Governance is often a secondary consideration, though investors still value clarity on climate risk management and on incentive structures tied to climate objectives.

One factor stands out: the allocation of financial resources. Around 75% of investors say that assessing how much funding a company dedicates to its transition is a decisive element in judging credibility.

Despite growing sophistication, investors still face significant barriers in evaluating transition plans. The main challenges being the difficulty of assessing long-term target feasibility, quantifying decarbonization efforts, and the persistent lack of standardized metrics and comparable data.

However, change is on the horizon. Regulatory developments, including the ongoing review of the EU Sustainable Finance Disclosure Regulation (SFDR) and updates to European product labels, are driving asset managers to refine how they define and evaluate transition investments.

The number of funds using the term “transition” is increasing rapidly. Data from Morningstar shows over 170 funds worldwide – mostly European – already include the term in their name, with 60% focused on listed equities, 20% on fixed income, and 80% classified as Article 8 under SFDR.

Ultimately, credible transition investing means looking forward – focusing on capital expenditure, R&D investments, and the robustness of future targets rather than just current emissions performance.

Transition planning has become an essential part of sustainable investment analysis, and the Natixis CIB GSH survey confirms this. While the journey is still in its early stages, there are clear foundations for progress.

For investors, transition plans are not only disclosure tools – they are strategic roadmaps that help align capital with the global net-zero pathway. For companies, they represent a way to demonstrate ambition, credibility, and accountability in navigating the low-carbon transition.