Why Financing Imperfect Companies Matters for Net Zero: Carbon Trust on Transition Finance

Transition finance is moving beyond backing companies that are already green. In this Q&A, the Carbon Trust's Isabel DiVanna argues that real emission cuts will come from financing high-emitting sectors like steel, cement, chemicals, aviation, and shipping, provided those companies have credible transition plans. She warns that selling high-carbon assets from a portfolio does not reduce global emissions if the assets keep operating under new ownership. DiVanna calls for practical definitions and stronger accountability, citing frameworks from ICMA and the Climate Bonds Initiative. The article is useful for investors, banks, and sustainability teams weighing how to fund hard-to-abate industries without funding greenwashing. It also frames transition finance as a way to turn today's biggest emitters into tomorrow's transition leaders.