Beyond the transition narrative: a conversation with Maria Lombardo

Transition plans and company disclosures tell only part of the story. RepRisk spoke to Maria Lombardo, Founder of RO-SE, about why banks need asset-level evidence and a wider view of value-chain impacts to assess whether transition commitments are translating into change on the ground.

# 1. Over the past five years, how have you seen the conversation around sustainable finance evolve?

Maria Lombardo: It has moved from ambition to accountability. Five years ago the conversation was about commitments, pledges, targets, and frameworks. Today the question is execution: can you prove it, asset by asset? That shift is healthy. It's also why I keep returning to the same point in my work at RO-SE and as a Board Advisor: without ground-truth, asset-level data, "transition" stays a narrative rather than a plan.

# 2. What separates a genuinely credible transition strategy from one that's largely narrative-driven?

ML: Capital expenditure. A credible transition strategy shows up in where the money is going, in capex, in asset retirement or retrofit plans, in real production and emissions trajectories, not just in the language of the sustainability report. Narrative-driven strategies are top-down and aspirational; robust ones are bottom-up, asset-level, and can be tested against evidence. Without that evidence, the strategy becomes just a story rather than a defensible plan.

Take steel. If a company continues operating higher-emitting plants without an actionable plan to replace, upgrade, or invest in more efficient facilities, you have to question whether the physical reality supports the transition narrative. The closer you can get to what a company is actually doing, rather than only what it says it intends to do, the better equipped you are to assess its progress.

# 3. How should banks think about the right level of due diligence?

ML: I think of it as zooming in and zooming out. If you're financing a company, you need enough granularity to understand what is happening at the underlying asset level. If you're financing a specific asset or project, you also need to zoom out and consider the wider value chain, dependencies, and potential impacts around it. Looking at only one level can leave important risks invisible.

# 4. What emerging risks do you think financial institutions may be underestimating?

ML: First, the transition's own supply chain. Critical minerals extraction, new infrastructure, and demands on land and water can all create significant nature and social risks if they are not properly understood and managed. Data centers are another example. They support the growth of software and AI, but their location, energy and cooling-water requirements, and effects on local resources can introduce risks that markets may not yet fully account for.

Then, there is corporate conduct risk around all of this. Labor, community relations, and governance rarely show up in emissions data, but can determine whether a project actually delivers or becomes a liability. Institutions still largely price carbon; they don't yet price nature, people, or conduct with the same discipline.

# 5. Can an activity support the climate transition while creating environmental or social risks elsewhere? 

ML: Yes, and pretending otherwise is how transition-washing happens. A mine feeding the battery supply chain, or a hydro project displacing a community, can be climate-positive on a spreadsheet and deeply damaging on the ground. Institutions need to look past the carbon metric to the full outcome: what is happening to the land, the water, the people around that asset. That means combining forward-looking transition indicators with evidence-led business conduct data; carbon numbers alone will always miss half the risk.

# 6. As sustainability disclosures evolve, how important are independent sources of information in assessing transition-related risks and opportunities?

ML: Independent data is essential. Company disclosures are self-reported, backward-looking, and uneven across markets; external sources provide the reality check. That's what I value about RepRisk's approach: its business conduct risk intelligence captures what a company does, seen from the outside, a necessary counterweight to what a company says about itself.

# 7. Looking ahead five years, what do you think will differentiate the leading financial institutions from the rest when it comes to sustainable finance and transition financing?

ML: The leaders will be the ones who stop treating transition as a compliance exercise and start treating it as a resilience strategy, because being future-proof means protecting the nature and people your business depends on. They will look beyond commitments to understand whether capital allocation and activity on the ground support the transition a company says it is making. The leaders need to show what changed with real impact on the economy, finance, and wellbeing of both people and nature.