20 November 2025
The momentum behind credible, science-based and transparent corporate transition plans has never been stronger.
Across the globe, companies are recognizing that building resilient business models in a carbon-constrained economy requires more than ambition — it requires clear, actionable pathways that define how each sector can align with climate neutrality. Robust transition plans have become a strategic necessity, helping organisations navigate rising uncertainties and volatile energy prices while positioning themselves for long-term competitiveness.
In this context, the European Commission has released the first EU Climate Law-aligned, sectoral decarbonisation pathways, a milestone publication designed to support companies and financial institutions in translating the EU’s climate objectives into concrete transformation strategies.
Climact is proud to have co-authored these pathways, contributing sector expertise, modelling capabilities and analytical insights in collaboration with the Commission (DG Environment & Climate), the Joint Research Centre, and ICF.
Why these pathways matter
Under the Paris Agreement, countries committed to aligning finance flows with a low-emission, climate resilient development pathway. Delivering on this commitment requires precise information on what a Paris-aligned trajectory looks like across sectors — including the technologies, investments and actions required.
Until now companies and financial institutions seeking to meet this objective lacked EU-specific and sector-specific reference points. This level of disaggregation is critical as the pace and nature of decarbonisation vary markedly between subsectors.
The new EU sectoral pathways address this need by:
- Providing a high level of granularity covering 24 sectors and one “Other sectors” fiche and dataset
- Providing benchmarks to set Climate Law-aligned decarbonisation targets
- Identifying key decarbonisation levers for each sector and subsector
- Clarifying investment needs for credible transition plans
- Enabling investors and financial institutions to better assess corporate transition strategies
They also help bridge the gap between company-level planning and economy-wide climate objectives, supporting organisations as they operationalise their contribution to EU climate targets.
To limit administrative burden, the pathways integrate EU climate objectives with existing sustainability reporting requirements, offering a voluntary, science-based reference framework that enhances consistency and comparability across markets.
Complementary to established standards and the Transition Pathways for European industrial ecosystems, these pathways focus on delivering quantitative, actionable insights rather than high-level guidance.
A broader international effort
The Commission’s work forms part of a wider global movement to align financial flows with climate objectives. Initiatives such as the International Platform on Sustainable Finance and the High-Level Expert Group (HLEG) on sustainable finance in low- and middle- income countries illustrate the growing international commitment to scaling up financing for sustainable investment.
The EU sectoral pathways translate these global ambitions into concrete trajectories, enabling governments, investors and companies to take informed, Paris-aligned action.
The study was presented on 12 November 2025 at the Industrial Forum’s Task Force on Transition Pathways, bringing together Member States, companies, investors and experts in transition finance to discuss their application and value.
Documents from the study are available here: https://climate.ec.europa.eu/eu-action/eu-funding-climate-action/making-finance-flows-consistent-climate-goals_en#european-climate-law-aligned-eu-sectoral-decarbonisation-pathways
Climact’s contribution
Over the past year, Climact’s prospective and data teams have worked closely with the Commission to develop the quantitative foundations of the sectoral trajectories. Our experts Jérôme Kisielewicz Michel Cornet, Corentin Bonte, Vincent Matton and Julien Pestiaux, contributed deep analytical expertise across modelling, technology pathways and investment needs assessment.
This work builds on Climact’s established experience in:
- sectoral modelling and foresight
- Paris-aligned transition planning
- investment needs quantification
- alignment with the EU Climate Law and sustainable finance framework
Ready to strengthen your transition plan?
Climact partners with companies, financial institutions and public bodies to turn climate ambition into actionable, science-based strategies.
Whether you aim to develop a Climate Law-aligned transition plan, assess sectoral decarbonisation levers, set credible targets, or align your investments with EU and Paris-aligned pathways, our experts can support you every step of the way.
Contact us to discuss how these new EU pathways can inform your strategy.