Introduction

The Investor Climate Action Plans (ICAPs) Expectations Ladder provides a framework enabling investors to assess and strengthen their climate strategies and transition planning. It is designed as a self-assessment checklist that consolidates guidance from existing initiatives and resources to support investors at different stages of climate action.

The framework organises encouraged actions across four tiers, ranging from early-stage investors beginning to address climate change (Tier 4) to those demonstrating leading net-zero practices (Tier 1). It addresses four core focus areas—investment, corporate engagement, policy advocacy and investor disclosure—with governance as a cross-cutting theme. The framework helps investors assess climate-related risks and opportunities, develop climate transition plans, embed climate considerations into investment strategy and communicate progress to stakeholders.

Focus area 1 Investment

The investment section outlines progressive expectations for integrating climate considerations into investment strategy, risk management and asset allocation.

Investors are encouraged to measure portfolio greenhouse gas (GHG) emissions and establish emissions-reduction or asset-alignment targets. Advanced tiers require alignment with global net-zero pathways and the goal of limiting warming to 1.5°C. Investors should set interim targets at least every five years, including milestones by 2030, and adopt recognised frameworks such as the Net Zero Investment Framework (NZIF), Science Based Targets initiative (SBTi) or the Net Zero Asset Owner Alliance Target Setting Protocol.

The framework recommends setting Scope 1 and 2 operational decarbonisation targets and, where material data is available, Scope 3 targets. Investors are also encouraged to address non-carbon emissions such as methane and align portfolio strategies with broader environmental objectives, including eliminating deforestation by 2030.

Strategically, investors should integrate climate considerations into investment analysis, decision-making and manager selection. Advanced actions include establishing policies for fossil fuels and other high-impact sectors, embedding climate considerations into product design and implementing decarbonisation strategies across high-emitting sectors. The framework also encourages phasing out unabated coal-based power by 2030 in OECD countries and by 2040 in non-OECD countries, while avoiding investment in new fossil fuel infrastructure inconsistent with science-based net-zero pathways.

Risk management expectations include portfolio climate risk assessments, scenario analysis aligned with 1.5°C and 2°C pathways, and integration of climate risk into asset allocation decisions. Investors are also encouraged to increase investments in climate solutions such as renewable energy and low-carbon technologies and support financing for emerging markets and nature-based solutions.

Focus area 2 Corporate engagement

Corporate engagement expectations focus on using investor influence to drive climate-aligned corporate strategies and disclosures.

Investors are encouraged to join collaborative engagement initiatives aimed at improving climate governance, emissions disclosure and transition planning. More advanced expectations include leading investor initiatives that encourage companies to adopt 1.5°C-aligned business strategies and publish credible climate transition plans.

Bilateral engagement with companies should prioritise reducing emissions across value chains and aligning corporate policy advocacy with the goals of the Paris Agreement. Investors should develop engagement strategies with clear milestones and escalation approaches and prioritise engagement with the highest-emitting portfolio companies.

Escalation measures include supporting climate-related shareholder resolutions, voting against management proposals that fail to address climate risks and, where necessary, filing or co-filing shareholder resolutions. Investors are also encouraged to address deforestation risks across corporate supply chains and publicly disclose voting policies and records related to ESG issues.

Focus area 3 Policy advocacy

The policy advocacy section outlines how investors can support policy environments that facilitate the net-zero transition.

Investors are encouraged to sign collaborative statements calling on governments to implement climate policies consistent with the Paris Agreement, including phasing out coal, eliminating fossil fuel subsidies, introducing carbon pricing and mandating climate-related financial disclosures aligned with frameworks such as TCFD, TNFD and ISSB.

More advanced actions include publishing original research supporting climate policy and actively advocating for policies that mobilise capital towards net-zero investment. Investors are also encouraged to ensure their own lobbying activities and those of associated trade bodies align with climate objectives and to establish escalation strategies where lobbying undermines the Paris Agreement.

Advocacy efforts may include supporting national net-zero targets, clean investment plans and initiatives such as Just Energy Transition Partnerships (JETPs), which aim to help coal-dependent economies transition while addressing social impacts.

Focus area 4 Investor disclosure

Investor disclosure expectations emphasise transparency regarding climate commitments, emissions and risk management.

Investors should publicly acknowledge climate change as a material risk and publish organisational climate objectives and targets. The framework encourages publishing portfolio emissions profiles and reporting Scope 1, 2 and 3 emissions where data is available. Advanced practices include third-party verification of emissions data and transparent methodologies used to calculate portfolio emissions.

Investors are also encouraged to publish climate risk assessments, disclose scenario analysis assumptions and align reporting with the Task Force on Climate-related Financial Disclosures (TCFD). Advanced disclosures include reporting on carbon credit use, progress against climate action plans and alignment with emerging frameworks such as the Taskforce on Nature-related Financial Disclosures (TNFD).

Focus area governance

Governance actions ensure that climate strategies are embedded within organisational structures and decision-making.

Investors are encouraged to develop policies that integrate climate risks and opportunities into investment beliefs and strategies. Boards should formally endorse climate strategies, define roles and responsibilities for climate oversight and ensure adequate resources and training are provided across the organisation.

Climate action plans should outline objectives, implementation processes and mechanisms for updating strategies as risks, data and best practice evolve. Organisations are also encouraged to secure independent verification of climate action plans and regularly report progress to boards and senior management.

Governance expectations include integrating climate metrics into remuneration and ensuring boards possess sufficient expertise to oversee climate risks and opportunities. Continuous training, organisational capability assessments and cross-team collaboration are recommended to support effective implementation of net-zero strategies.