Climate strategy and SDG 13: Connecting risk management and real economy impact

Lauren Costello | Analyst, Research & Innovation, S&P Global Sustainable1
Andrea Ferravante | Lead Data Scientist, Research & Innovation, S&P Global Sustainable1
Sol Wilhelm | Data Scientist, Research & Innovation, S&P Global Sustainable1

Sustainable development has become a key lens for assessing long‑term economic resilience and social stability. The UN’s Sustainable Development Goals (SDGs), adopted in 2015, provide a shared blueprint to addressing global challenges through 17 objectives that cover issues from poverty and climate action to institutional strength. Progress on climate action remains uneven, with many countries falling behind on climate mitigation and adaptation efforts. For companies, this creates a dual challenge: growing scrutiny of negative impacts and mounting pressure to scale products and services that support SDG outcomes.

SDG 13 calls for urgent action to combat climate change and its impacts. Climate‑related threats, such as extreme weather, ecosystem degradation and failure of climate action, rank among the most severe global risks, making unmanaged climate exposure a core financial and strategic concern. Research from the Intergovernmental Panel on Climate Change¹, Swiss Re² and McKinsey³ suggests that physical climate impacts and disorderly transition pathways could put trillions of dollars of corporate value at risk through asset damage, productivity losses, supply chain disruption and higher financing costs. In this context, SDG 13 sets clear expectations for companies: measure and reduce greenhouse gas emissions, align business models with a low‑carbon transition, and build resilience to physical climate impacts. Robust climate strategies can unlock low‑carbon growth, reduce operational volatility and support long‑term value creation.

Within our ESG Scores and Raw Data, underpinned by the S&P Global Corporate Sustainability Assessment (CSA), we assess how companies deliver and manage the policies, programs and key performance indicators that support their approach to climate action. The CSA is an annual evaluation of sustainability practices covering about 14,000 companies worldwide.

In this data brief, we analyze the 2025 CSA results for 8,390 companies specific to climate strategy, alongside the recently updated SDG Analytics methodology.* This methodology evaluates how companies contribute to the SDGs through their products, services and business activities using a seven‑point scale, ranging from very positive to very negative. The methodology combines three components:

1. The type of contribution that business activities make to each SDG
2. A geographic additionality adjustment that rewards positive activities in high‑need markets
3. A controversy adjustment that captures material ESG incidents and their implications for sustainable development using S&P Global’s Media and Stakeholder Analysis (MSA) methodology

* The UN is not affiliated with, does not endorse and has not reviewed the S&P Global Sustainable1 SDG Analytics methodology, products or related content.

This analysis focuses on the first component — the type of business activity contribution. Geographic and controversy adjustments are excluded to provide a more representative view of sector-level behavior, capturing typical business activity contributions without additional granularity that may influence aggregate scores.

Figure 1 overlays each sector’s SDG 13 contribution with its average CSA climate strategy score. These two measures are related but not equivalent. Together, they reveal that sectors with the most negative climate impact often had higher climate management scores, as their exposure to transition and physical risks creates the greatest need for robust climate governance and strategy. Sectors with lower inherent climate impact often had more favorable SDG 13 contributions, even when their climate management practices, as reflected in CSA scores, were less mature.

Combining both metrics connects the climate impact of companies’ business activities and revenue with how they manage their transition and physical climate risks. High climate strategy scores can reinforce a positive SDG 13 contribution by signaling robust governance, clear decarbonization pathways and preparedness for climate-related shocks.

Divergence between the two indicators also provides meaningful insight. Sectors with structurally carbon-intensive or high-risk business models may show a negative SDG 13 contribution alongside relatively high climate strategy scores if companies have developed mature climate governance, risk oversight and transition planning. Conversely, weaker climate strategy scores may indicate that climate-related management practices are still developing relative to the climate impact of a company’s business activities. This combined view enables a more nuanced assessment of corporate alignment with SDG 13, distinguishing between business contribution to climate solutions and the quality of climate risk management and transition preparedness.

When read by CSA score, figure 1 highlights a relationship between management quality and actual climate outcomes. Industrials (53) and materials (52) were among the higher-scoring sectors but showed more negative contributions to SDG 13. For the industrials sector, most revenue was classified as neutral, with just over a quarter falling into the negative or moderately negative categories. The materials sector had a more even split between neutral performance and a predominantly negative remainder. In other words, sectors with structurally high emissions and negative SDG 13 contributions tended to score higher on climate strategy, reflecting that those companies face greater climate risk and therefore a stronger business case for mature climate governance, risk oversight and transition planning.

This contrasts with the financials (46) and healthcare (42) sectors, both of which had lower climate strategy scores but comparatively favorable SDG 13 contributions. Both sectors’ contributions were categorized as largely neutral overall, with the balance skewing toward moderately positive rather than negative. This suggests that sectors with less inherently carbon-intensive business models may be able to generate better climate-related outcomes even while climate management practices are still developing.

The energy sector (45) was a clear outlier, combining the most negative SDG 13 profile with a lower climate strategy score. This indicates that many companies in this sector have high climate impact and weaker evidence of climate governance, target-setting and climate risk management. The utilities sector (54) also exhibited negative to moderately negative contributions to SDG 13, reflecting its emissions-intensive asset base, but it had the highest climate strategy score. Climate strategy scores suggest that utility companies may be further along in formalizing climate oversight, setting quantified targets and integrating climate risks into strategy, while energy companies’ scores remain relatively lower compared with the sector's climate impact profile.

Results from SDG Analytics and the CSA climate strategy criterion highlight important differences in how sectors align with SDG 13. Heavy-emitting sectors such as energy, materials and industrials showed negative to moderately negative SDG 13 contributions, reflecting the climate impact of carbon-intensive business activities and revenue streams. At the same time, sector-level average scores suggest that companies are examining climate governance, target-setting and risk management, even if these efforts have not yet translated into business models and asset portfolios fully aligned with a low-carbon transition.

These findings reinforce the separate yet complementary nature of SDG Analytics and CSA climate strategy scores. Sectors with the most negative climate impact generally had higher climate management scores, indicating that where climate risk is greatest, companies are more likely to formalize climate governance. However, the energy sector was a notable exception, combining strongly negative SDG 13 contributions with relatively weaker management scores, and therefore highlighting a gap between climate impact and climate preparedness in one of the most systemically important sectors for transition.

Examining these indicators together provides a more complete view of corporate climate positioning by separating climate impact from climate management quality. SDG 13 contributions show where business models remain highly emissions‑intensive or, conversely, where they support more positive climate outcomes. CSA climate strategy scores show how far those same sectors have progressed in governing and managing their transition and physical risks. Although the combination does not yet identify sectors with high performance for both metrics, it reveals where climate impact is highest, where management capabilities are relatively advanced, and where the gap between the two is widest.

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Endnotes

¹ Working Group II, Intergovernmental Panel on Climate Change (2022). Climate Change 2022: Impacts, Adaptation and Vulnerability. IPCC Sixth Assessment Report. The Intergovernmental Panel on Climate Change (IPCC) documents increasing firm‑level economic losses from floods, heat stress and drought across sectors such as agriculture, infrastructure, manufacturing and logistics, highlighting the financial consequences of unmanaged physical climate risk.

² Swiss Re Institute (2021; updated 2023). The economics of climate change: no action not an option. Swiss Re estimates that global GDP could decline by about 11%-14% by 2050 under current trajectories, with losses reaching up to 18% in severe warming scenarios. This has significant implications for corporate revenue, asset values and insurance costs.

³ McKinsey Global Institute (2020). Climate risk and response: Physical hazards and socioeconomic impacts. McKinsey estimates that by 2050, $4 trillion-$6 trillion of annual global economic value, about 2%-3.5% of 2050 GDP, could be at risk from physical climate hazards, driven by impacts on fixed assets, supply chains and labor productivity.