86% of coal mining companies, including all in Asian emerging markets and developing countries, misaligned with Paris Agreement goals
09 April 2025
- 30 of 42 assessed coal companies operate in emerging markets and developing countries (EMDCs). These firms represent 58% of the sector’s total market capitalisation ($344 billion), with 74% of that value in Chinese companies.
- However, notable transition finance opportunities exist in many EMDCs, especially in Asia: China, India and the Philippines are among the countries with the largest pipelines of new renewable energy capacity.
The TPI Centre at the London School of Economics and Political Science (LSE) has released new research evaluating the climate ambitions of coal mining companies, and has found that over 86% of companies are not aligned with Paris Agreement goals or do not provide adequate emissions disclosure. This finding holds for alignment in the short (2028), medium (2035) and long term (2050).
The TPI Centre found that, while some companies are aligned with the ‘Below 2°C’ benchmark, minimal progress has been made by both thermal and metallurgical coal companies toward the more ambitious 1.5°C goal. Just two of the assessed companies achieved 1.5°C alignment across all timeframes, and only did so by selling off their coal assets. While this sell-off strategy can rapidly reduce a company’s carbon footprint, it also shifts the challenge of managing emissions to new owners, highlighting a trade-off between immediate alignment and long-term sector-wide decarbonisation.
Emerging markets and developing countries have a critical role in the global coal transition, as many of their economies remain heavily dependent on coal for energy security and industrial growth. Countries such as India, Indonesia, and China continue to expand coal capacity as they pursue economic development, even while facing growing pressure to accelerate decarbonisation.
The Net Zero Emissions by 2050 Scenario developed by the International Energy Agency (IEA) assumes a complete phase-out of unabated coal-powered electricity generation by 2040. However, global coal consumption reached a record high of 8.77 billion tonnes in 2024, underscoring the ongoing challenge of decreasing dependence on this fossil fuel. Over the period to 2030, EMDCs outside China require about USD 1 trillion in investment to put them on a path to transition securely away from unabated coal.
While coal contributes to almost half of the energy supply in Asia, according to the IEA, the TPI Centre’s sovereign research also shows significant renewable energy opportunities in Asian EMDCs. The pipeline of new renewable energy capacity in these countries amounts to about 45% of total global megawatts (MW) of planned capacity of renewables, of which 37% is from China.
The TPI Centre has created a new methodology to assess the carbon performance of coal mining companies. This approach evaluated companies' emissions reduction targets against benchmarks based on the Paris Agreement's goals, providing investors with insights into these companies' alignment with global climate objectives. A total of 42 coal companies with a combined market capitalisation of $344 billion were assessed across their thermal and metallurgical coal businesses.
Government policies, along with financing from multinational, local and private sources, are critical to enabling developing economies to phase out coal in transition to a just, sustainable and low-carbon economy while safeguarding economic security and stability. When overlaying the company emissions data with our country assessments, we identify where transition investment may be most needed, including renewable opportunities in markets such as China, India, the Philippines and Indonesia - Ali Amin, Policy Fellow at the TPI Centre, LSE.
Investors are committed to supporting the ambitious and orderly replacement of coal with clean energy solutions, but this research shows how much work there is to expedite the transition. Green financing and climate-aligned investments are essential to support a just transition in coal-reliant economies, especially for emerging markets in Asia. The TPI Centre’s standardized metrics enable objective and comparable assessments across sectors and portfolios and are a crucial tool for investors like us to price climate risks, identify opportunities and facilitate engagement - Jason Mortimer, Head of Sustainable Investment – Fixed Income at Nomura Asset Management.
Notes to editors
- The TPI Centre is an independent, authoritative source of research and data on the progress of corporate and sovereign entities in transitioning to a low-carbon economy.
- The TPI Centre is the academic partner of the Transition Pathway Initiative (TPI), a global initiative led by asset owners and supported by asset managers. As of April 2025, with over 150 investors globally, representing around US$80 trillion1 combined Assets Under Management and Advice, have pledged support for TPI.
- The TPI Centre also assessed 70 countries in 2024 as part of the Assessing Sovereign Climate-related Opportunities and Risks (ASCOR) project.
- Market capitalisation coverage is calculated for the companies for which this sector represents their primary activity. The calculation can change due to fluctuating corporate valuations, the size of the company universe assessed, or due to company sectoral reclassifications.
1 This figure is subject to market-price and foreign-exchange fluctuations and, as the sum of self-reported data by TPI supporters, may double-count some assets.