State of Transition in Sovereigns 2024

The State of Transition in Sovereigns 2024: Tracking national climate action for investors report provides a comprehensive assessment of how countries are progressing towards global climate goals, including alignment with the Paris Agreement. Using the ASCOR framework, the report enables investors to evaluate sovereign climate performance, risks and opportunities in the transition to a low-carbon and climate-resilient economy.

The report reviews the climate change performance of 70 high-, middle- and low-income countries assessed against the ASCOR framework in 2024. Collectively accounting for more than 85% of global greenhouse gas (GHG) emissions and 90% of global GDP, the country universe covers the key national players in the low-carbon transition. They are also the most relevant countries for investors to incorporate climate change considerations into their sovereign bond evaluations, as together they cover 75–100% of the major sovereign bond market indices.

Key findings

Emissions Pathways

• Forty of the 70 countries assessed have reduced their emissions over the past five years and almost all have established medium-term targets.
• Not a single country has a historical emissions trend or 2030 target that aligns with its national 1.5ºC benchmark. Only a few are aligned with their ‘1.5ºC fair share’ (an allocation based on equity principles) in their emissions trends or 2030 targets.

Climate Policies

• Forty out of the 70 countries have established a legal framework for national climate policy through a climate framework law.
• Countries perform poorly on commitments to phase out fossil fuel subsidies and production, making finance flows inconsistent with a 1.5ºC future.

Climate Finance

• Most of the developed countries (81%) assessed fail to contribute or commit to their proportional share of the US$100 billion international climate finance goal.
• Only one-third of the developing countries assessed have been transparent about the costs of their mitigation and adaptation measures. This may constrain public and private finance flows towards these objectives.