How the Net Zero Engagement Initiative delivered impact in 2025

In 2025, the Net Zero Engagement Initiative (NZEI) continued to demonstrate how collaborative investor engagement can help manage climate-related risks and drive real-world decarbonisation.

With 113 investor organisations actively engaging 139 companies across 26 countries and 14 sectors, NZEI expanded its reach while maintaining a clear focus on its six core asks.

Investors carried out more than 330 engagement activities during the year, including 103 meetings, over 100 written exchanges and 53 AGM-related actions.

Importantly, two-thirds of focus companies made progress against NZEI's core engagement objectives, demonstrating the initiative's ability to drive meaningful outcomes across climate ambition, targets, disclosures, decarbonisation strategies and capital allocation.

This progress reflects NZEI's agile design and targeted approach. The initiative focuses on large corporate emitters that are systematically important within high‑emitting sectors and with the potential to make meaningful progress towards net zero. These include companies across sectors such as retail, technology, steel, consumer goods and chemicals. By complementing Climate Action 100+, which targets the world’s largest emitters, NZEI broadens the reach of investor engagement and supports portfolio alignment with the goals of the Paris Agreement.

The year also marked an important evolution in NZEI's role within the investor engagement landscape. As the first IIGCC initiative to incorporate private company engagement, NZEI broadened the scope of investor influence beyond traditional public markets and laid the foundations for greater engagement in emerging markets and developing economies (EMDEs).

The initiative continued to strengthen investor collaboration through structured engagement groups, sector-focused support and practical resources, while aligning company engagement with the Net Zero Investment Framework (NZIF).

Looking ahead, NZEI enters the second half of 2026 with strong momentum, a growing global footprint and a clear pathway to scale engagement across new geographies, sectors and companies. Building on its work in emerging markets, NZEI has now added 19 new companies across 7 countries in this next phase of engagement.

Explore the full NZEI 2025 Progress Report.

Case studies: How did NZEI support DRAX and Veolia?

Drax

Driving Progress: Investor engagement supports Drax’s Net Zero alignment

Over the past three years, sustained investor engagement through the Net Zero Engagement Initiative (NZEI) has supported progress in Drax Group Plc’s climate transition planning.

Dialogue began in 2023, when investors wrote to the company setting out key investor expectations seeking clarity on its management of climate-related risks:

• Comprehensive net zero commitment
• Aligned greenhouse gases (GHG) targets
• Improved disclosure across emissions and strategy

Investors also encouraged enhanced disclosures on biomass sourcing practices and highlighted the importance of embedding nature-related considerations into Drax’s long-term plans.

This initial letter was followed by regular company meetings and direct dialogue, providing opportunities for investors to deepen understanding of Drax’s operational context and to reinforce expectations for a credible, science-aligned transition plan. In December 2024, Drax confirmed the development of a Climate Transition Plan consistent with investors’ core asks and signalled an openness to further dialogue.

The company went on to publish its Climate Transition Plan in 2025, alongside a revised sustainability framework and updates to its biomass sourcing policy. As part of this review, Drax committed to phasing out the use of Canadian wood pellets by April 2027 - an important step to strengthen supply chain sustainability and respond to investor expectations.

Looking ahead, investors plan to continue engagement on Drax’s capital allocation and long-term decarbonisation strategy. They will also focus on encouraging further disclosure and improved transparency of the biomass sourcing, in line with the new policy to deliver climate, nature, and people-positive outcomes.

“We value the constructive engagement and challenge which the NZEI have provided as we look to develop our policies on sustainability. We see this as a great example of how corporates and stakeholders can collaborate to deliver positive outcomes and we welcome the opportunities to continue this process,” Drax Capital said.

 “The portfolio managers at Premier Miton are in frequent contact with Drax’s management and have closely followed their progress on decarbonisation over the years. We believe they have successfully managed the transition from coal to renewable power and follow them as they transform into a flexible generator”, Premier Miton, main engagers on Drax Capital engagement, added.

Veolia

Productive cooperation between the Net Zero Engagement Initiative and Veolia regarding Veolia's climate plan
Investor signatories of the NZEI worked with Veolia Environment S.A to strengthen its climate action plan, which was later approved in July 2024 by the Science Based Targets initiative (SBTi) and rated “Advanced” by Moody’s.

NZEI signatories met with senior leaders at Veolia in a series of meetings and workshops, sharing resources to outline investor expectations of a company transition plan, including:

• A pedagogical explanation and breakdown for each business
• Emissions trajectory and contributing levers
• Disclosures on coal in Central and Eastern Europe (CEE) and China
• Related climate governance

This interaction added value for the company, which had already been formulating the plan before it received a letter from NZEI signatories in February 2023.

The climate plan:

• Targets a 50% reduction in scope 1 and 2 emissions and a 30% reduction in scope 3 emissions by 2032 (against a 2021 baseline), supporting Veolia's 2050 net zero commitment.
• Includes governance, risk management and performance measures aligned with TCFD requirements.

Veolia invested €650 million in its climate strategy between 2018 and 2024 and has pledged a further €950 million by 2030.

Read full case study at IIGCC.org