From commitments to capabilities: a new measure of climate credibility

The implementation gap

The launch of the public consultation on ISO 14060, the proposed International Standard for net zero aligned organisations, comes at a pivotal moment for corporate climate action. Over the past decade, organisations have built the architecture of the climate transition. Net zero commitments have multiplied, investors have increasingly incorporated climate risk into decision-making, and reporting has become progressively more sophisticated. Emissions accounting has matured, disclosure requirements have expanded, and businesses now generate more climate data than ever before. Yet better information has not always led to better implementation.

The challenge is no longer simply understanding climate risk or making commitments, but delivering against them. As Susan Taylor Martin, chief executive of BSI Group, puts it: "In a time of growing economic and geopolitical uncertainty, businesses need stable ground rules that allow them to plan and act with confidence. The ISO Net Zero Aligned Organizations Standard provides a globally recognised framework that helps organizations build resilience, manage climate risk, and demonstrate that their business plans are future-proofed."

According to the latest Net Zero Tracker Stocktake, almost two-thirds (63%) of the world's largest listed companies had adopted net zero targets by 2025. Yet only around 7% met the Tracker's minimum integrity criteria, while almost one-third of companies with net zero targets had still not published a transition plan.

A broader shift in climate standards

That is where ISO 14060 may prove significant. Rather than introducing another climate framework, the proposed standard is designed to help organisations integrate emissions accounting, target-setting, transition planning and disclosure into the management systems they already use to govern their operations.

For organisations that have spent years navigating an increasingly fragmented landscape of frameworks and reporting requirements, the objective is less about creating new obligations than making implementation more coherent. As Noelia Garcia Nebra, head of sustainability and partnerships at ISO, says: "[The standard is] not just calculate and report about it... It's calculate, and now once you understand where you are today, then start looking at what are the different opportunities for reduction."

There are early signs that this approach can make a practical difference. Since the climate-related amendments introduced under the London Declaration were incorporated into ISO Management System Standards in 2024, BSI Group found that 90% of organisations that had not previously considered climate within their management systems had either done so or planned to as a direct result. Among those already taking action, more than four in five reported that climate had become embedded as a strategic priority. While ISO 14060 is still under consultation, those findings suggest that integrating climate into the management systems organisations already use may help bridge the gap between ambition and delivery.

The launch of ISO 14060 is not happening in isolation. The Science Based Targets initiative also published Version 2.0 of its Corporate Net-Zero Standard in June 2026, describing it as "the next phase of the net-zero transition, from ambition to real-world implementation." The revised framework places greater emphasis on transition planning, implementation, continual improvement and transparent reporting of progress and barriers, reinforcing a broader shift across the standards landscape. Although ISO and SBTi serve different purposes, both suggest that the next phase of corporate climate action will be judged less by the targets organisations set than by the credibility of the systems they have in place to deliver them.

That convergence is also being recognised by practitioners. "We are at an inflection point in how net zero commitments are made and assessed," said Yee Chow, global head of sustainability at Zevero. "SBTi V2.0 and ISO/DIS 14060 arriving in the same month signals that the standard-setting community has reached consensus on what credible looks like: science-aligned interim targets, verified transition plans, material Scope 3 coverage, and a hard limit on the role of carbon credits."

Together, these developments suggest that credibility is increasingly being judged not by the targets organisations announce, but by their ability to demonstrate how those targets will be delivered. If implementation becomes the basis on which credibility is judged, it also changes what investors, lenders and insurers need to evaluate.

What financial markets are looking for

The same shift is visible within financial markets. As climate risk becomes more financially material, investors are looking beyond emissions data towards evidence that organisations have a credible approach to managing the transition. Transition plans are increasingly seen as a means of signalling implementation capability, not simply climate ambition. Reports released around LCAW, including MSCI's Transition Finance Tracker, suggest investors are placing greater emphasis on transition readiness and implementation capability.

For investors, disclosure has improved visibility but not necessarily confidence. Emissions data, climate scenarios and transition plans provide a clearer picture of exposure, yet they reveal much less about whether an organisation has the governance and operational capability to deliver the change it has promised. That concern is reflected in recent work by the Network for Greening the Financial System (NGFS), which argues that transition plans should function as strategic management tools, embedding governance, risk management, capital allocation and resilience into business decision-making rather than existing primarily as disclosure documents.

Lenders are moving in a similar direction. In its 2026–2030 Financial Sector Strategy, the European Bank for Reconstruction and Development identifies robust transition planning as increasingly important in meeting investor expectations and strengthening resilience to climate-related risks and opportunities. The emphasis is no longer simply on understanding climate risk, but on demonstrating the institutional capability to manage it.

Physical climate risk is already reshaping insurance markets. Aon's 2026 Climate Catastrophe report highlighted 2025 losses of over $42 billion in flooding alone, while Swiss Re expects annual insured natural catastrophe losses to reach around $148 billion in 2026. More significant still is the widening protection gap. Swiss Re's report estimates that $424 billion of economic losses from natural catastrophes are now uninsured, increasing the financial burden carried by businesses, households and governments. At the same time, the transition to net zero creates its own set of operational and financial risks. The Geneva Association argues that insurers increasingly need evidence not only of exposure, but of how organisations are managing such risks. The question is becoming less whether climate risk exists than whether it is being governed effectively.

Viewed in that context, ISO 14060 is more than another climate framework. By building on the management systems many organisations already use, it offers a structured way of demonstrating how climate transition is governed, implemented and continually improved. If adopted widely, it could give financial markets something they have often lacked: a more consistent basis for assessing not just climate ambition, but organisational capability.

Climate transition becomes a test of management quality

That shift was also evident during London Climate Action Week, where discussions increasingly centred on resilience, transition planning and physical climate risk rather than disclosure alone. The message was remarkably consistent: organisations will increasingly be judged not by the targets they announce but by their ability to operationalise them.

And the standards landscape is converging around a common expectation: that organisations must be able to demonstrate credible implementation.

Two of the world's most influential net zero standards have, independently and almost simultaneously, shifted their emphasis towards implementation, transition planning and credibility. Organisations may still choose different pathways, but as practical implementation frameworks mature, it becomes increasingly difficult to argue that the absence of a structured approach is the reason progress has stalled. Whether ISO 14060 ultimately achieves widespread adoption remains to be seen. What is already becoming clear, however, is that climate transition is no longer judged solely by the targets organisations announce or the data they disclose. Increasingly, it is becoming a test of management quality. If that shift continues, climate capability may become something financial markets can evaluate and, ultimately, price.

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