New Report Reveals Emerging Market Companies Poised to Bridge SDG Gaps & Attract Sustainable Finance

The new report leverages the Impact Disclosure Guidance on Sustainable Development Impact Disclosures (SDID). The Guidance was developed by the Impact Disclosure Taskforce, co-chaired by J.P. Morgan and Natixis, to advance standardised reporting that connects sustainable development with investment and financing decisions.

The report is available here.

---

In one of the first financial markets grade applications of an LLM-based system in sustainable finance, ClimateAligned applied its AI capability to the SDID framework, analysing reporting from 268 entities from 24 emerging markets with a combined market capitalisation of US$12 trillion. The data pool represents 40% of the MSCI Emerging Markets Index.

Over 214 disclosure elements in total were assessed incorporating 186 SDG-specific indicators and 28 broader, non-SDG-linked indicators, all integrated within the SDID framework.

Bridging the Implementation Gap found that 97% of the 268 entities are already disclosing key SDG impact metrics, a significantly higher assessment than previously understood for EM companies and establishing a stronger-than-expected baseline for future sustainable finance.

However, only half of companies with disclosed metrics have set SDG-aligned targets, revealing a critical gap between measurement and management.

Krista Tukiainen, Co-founder & CCO, ClimateAligned

"The global financing gap for achieving the SDGs in emerging markets stands at an estimated $4 trillion annually. Our research shows that with the support of the Impact Disclosure Taskforce’s guidance, emerging market corporates are ready to embrace SDG-aligned practices at scale."

"Harnessing AI for real-time analysis opens new pathways for financiers and investors looking to identify and help create sustainable investment opportunities in emerging markets. By helping companies set specific, meaningful targets and bridge reporting gaps, investors can better direct capital to impactful projects across both environmental and social spheres."

Key Findings

• Strong Baseline in Environmental Disclosure: Over 90% of companies report metrics for SDG 7 (Affordable and Clean Energy) and SDG 13 (Climate Action), signalling a solid foundation for enhanced environmental impact reporting.
• Readiness for Structured Reporting: Over 90% of companies maintain governance frameworks that support annual impact reporting, offering a robust foundation for scaling SDIDs.
• Gap in Target Setting: Although disclosure of impact metrics is common, only 39% of companies have set targets for four or more SDGs, underscoring the need for stronger impact management.
• Inconsistent Social Impact Reporting: Reporting on social dimensions, such as SDG 10 (Reduced Inequalities), remains sparse. Addressing these gaps is essential for holistic SDG contributions.

The report demonstrates a technology-led, scalable approach to simplify SDID production, especially for emerging market companies. It also improves visibility of best practice, allowing companies to attract sustainable capital more effectively by aligning with the Taskforce’s Guidelines on SDID.

Arsalan Mahtafar, Head of J.P. Morgan Development Finance Institution and Co-chair of the Impact Disclosure Taskforce:

"As sustainable finance moves towards structured impact investment, the Impact Disclosure Taskforce’s SDID guidance will be indispensable. This report underscores that with targeted support, emerging market firms can drive SDG-aligned practices and open up significant pathways for sustainable capital to address critical development gaps."

---

Notes to Editors

ClimateAligned is a London based technology company specialising in AI-driven solutions to scale sustainable finance. Backed by leading venture capitalists including Pale blue dot and Frontline Ventures, ClimateAligned’s mission is to empower investors with transparent, data-driven insights for impactful climate and SDG-focused investing.

ClimateAligned is a member of the Impact Disclosure Taskforce.

Media Contact: Krista Tukiainen, Co-Founder & CCO: krista@climatealigned.co

climatealigned.co / LinkedIn / Twitter (X)