Nearly three-quarters of Asia Investor Group on Climate Change members now have Net Zero portfolio targets.
But fewer than half publish detailed transition plans, exposing a critical implementation gap.
The latest AIGCC report shows broad progress across 28 climate metrics, but also weak fossil fuel policies and limited just transition strategies.
Around 74 per cent of members of the Asia Investor Group on Climate Change (AIGCC) have adopted Net Zero portfolio emissions targets, but only 42 per cent have published detailed climate transition plans, according to a new analysis.
The study, which analysed 240 investors managing a combined $123 trillion in assets, found that institutional investors in Asia are continuing to strengthen climate action despite a perceived global retreat from climate commitments. Of the investors assessed, 202 are headquartered in Asia and collectively represent mainstream capital ownership and management in the region, with median assets under management of $110 billion.
AIGCC’s seventh annual State of Investor Climate Transition in Asia report showed investors improved across all 28 climate metrics assessed this year, signalling growing sophistication in climate finance and transition planning.
One of the clearest shifts was in climate policy engagement. About 25 per cent of investors now publicly advocate for clearer and more investable climate related policy frameworks, an 18 percentage point increase from 2024. Among AIGCC members, disclosure of climate-related policy advocacy tripled from 19 per cent in 2024 to 58 per cent in 2025.
The report noted that policymakers across Asia confirmed AIGCC’s policy engagement activities, including consultation submissions and investor briefings, had helped shape policy objectives.
Rebecca Mikula Wright, chief executive officer of AIGCC, said investors in Asia are increasingly translating climate awareness into implementation and policy engagement. “This year’s results have shown that investors’ increased awareness of climate risks has led to stronger investor ambition and implementation.”
The study found that 100 per cent of AIGCC members now recognise climate change as a material financial risk, while 58 per cent have set interim emissions reduction targets.
Investments in climate solutions and transition finance also increased sharply. Thirty per cent of investors now have quantitative commitments to increase investments in climate solutions, up 11 percentage points from last year. Among asset owners such as pension and sovereign wealth funds, the figure rose to 35 per cent, compared to 26 per cent for asset managers.
Energy storage emerged as the leading climate investment priority, with investor interest doubling from 40 per cent in 2023 to 82 per cent in 2025. Renewable energy generation, green infrastructure, low carbon transport and nature based solutions also attracted strong investor interest.
“In spite of ongoing geopolitical risks and conflicts that have worsened this year, investors are increasing their allocations to renewables and other low carbon solutions,” Wright said.
The report also highlighted a growing focus on stewardship. About 26 per cent of investors now publish annual stewardship or active ownership reports covering engagement and proxy voting activities, up four percentage points from 2024. Investors are also beginning to adopt system wide stewardship approaches that address sectoral and policy barriers beyond individual company engagement.
At the same time, the report identified major gaps in investor transition planning. Less than one third of investors have established policies or strategies related to fossil fuels and other high emitting sectors. Only 22 per cent of investors have published detailed climate transition plans with implementation pathways.
Physical climate risk disclosure among AIGCC members rose to 61 per cent in 2025 from 29 per cent in 2023, reflecting increasing concern about the economic impacts of heat stress, flooding and extreme weather across Asia.
The report also identified just transition planning as an emerging but underdeveloped area. Only 11 per cent of investors currently have a defined just transition strategy, with progress uneven across developed and emerging Asian markets.
Liu Chunyen, chief investment officer at AIA Singapore, said investors in the region are increasingly collaborating to accelerate implementation.
“It is encouraging to see many of our peers also stepping up, giving us a confidence boost to work on the climate transition, which is a complex issue that requires all hands on deck,” Chunyen said.
Thidasiri Srisamith, chief investment officer at Kasikorn Asset Management, said climate integration is now central to fiduciary responsibility.
“Climate risk is systemic financial risk,” Srisamith said. “As a long term investor with fiduciary responsibilities to our beneficiaries, addressing climate risk is part of that fiduciary duty.”