Financial institutions face a critical challenge in assessing corporate transition planning: the absence of regional context. Although climate targets and decarbonization strategies are increasingly common in corporate disclosures, they often overlook the local economic, policy, and infrastructure conditions that shape the pace and feasibility of transition. This disconnect limits the usefulness of assessments, hindering the ability of financial institutions to effectively manage climate-related risks and opportunities.

A regional approach strengthens assessments by:

• Revealing asset-level exposure and transition-critical dependencies, such as reliance on local infrastructure, policy support, or emerging technologies

• Enhancing the accuracy and comparability of corporate performance by benchmarking targets against regional transition pathways and evaluating them in the context of local conditions

• Uncovering opportunities in underserved regions, enabling a more diversified climate finance strategy

This paper outlines practical guidance for regionalizing corporate transition assessments by exploring three frontiers:

1. Leveraging regional pathways to contextualize targets and identify dependencies
   Financial institutions can benchmark corporate targets against regionally grounded transition pathways to assess alignment and feasibility. These pathways offer insights into the technologies, policies, and market dynamics most relevant to a company’s operating environment. This paper provides a guide to picking the right regional pathways to support a given analytical use case.

2. Evaluating critical dependencies
   Transition plans depend on a variety of external factors, such as infrastructure build-out, policy enforcement, and supply chain readiness. The paper introduces a practical framework to help institutions prioritize key dependencies, evaluate their possible evolution, and identify mitigating actions.

3. Closing the data divide
   In the face of uneven or incomplete corporate disclosures, alternative data sources — such as regional statistics, sectoral benchmarks, and firm-adjacent information — can help fill critical gaps. The paper offers a structured approach to using proxies transparently and constructively, with an example tailored to the power sector.

Although financial institutions may face capacity constraints and limited access to high-quality regional data — particularly in emerging economies — they can still begin to regionalize assessments by using a tiered, risk-based approach.

Ultimately, building a credible, scalable system for regionalized assessments will require collaboration among stakeholders: regulators, data providers, corporations, civil society, and finance. Through continued refinement and collective effort, regionalized transition assessments can build on and enhance existing decarbonization planning efforts across the global economy.

Acknowledgements

We would like to thank our colleagues at RMI who have contributed to this work. In particular, Nicky Halterman, Jacob Kastl, Matthias Kensbock, Dhroovaa Khannan, Sam Kooijmans, Antoine Lalechere, Weiting Li, Estefania Marchan, Aubrey McKinnon, Aamir Shams, and Thomas White each played a vital role in shaping the research and ideas presented in this report. We also thank our strategic partners and other financial institutions and experts for their ongoing support and thoughtful review. Their guidance and engagement throughout the development of this work have been invaluable, ensuring its relevance and impact.