According to the UN, to reach net-zero by 2050 and meet Paris Agreement targets, we need to reduce global emissions by 45% by 2030. In line with this goal, 2030 became a popular deadline that companies set to achieve emissions cuts and other sustainability goals. However, as the deadline approaches, companies are starting to realize that their grand plans to decarbonize their value chains require concrete, long-term action.
Companies that have set ambitious emissions reduction and sustainability goals deserve credit for that ambition, and now, many of them face the challenge of demonstrating transparent progress toward those goals.
But to date, there’s been a disparity between aspiration and action. Research from Accenture shows a widespread lack of progress, with just “18% of companies on track to reach net zero by 2050.” That figure is likely to change as stakeholder expectations shift from goal setting to progress and tracking.
Evolution of expectations
Ten years ago, setting ambitious emissions reduction goals was laudable and market-leading. Despite a clear roadmap for achieving net-zero, publicly setting the goal signaled commitment and drove similar ambitions across sector leaders. Today, with an array of government mandates and reporting frameworks in place, many of which require mitigation roadmaps and transition plans, stakeholders expect transparent, accessible reports on progress.
The Science Based Targets Initiative (SBTi), which validates that reduction targets align with sound science and lay the foundation for meaningful decarbonization initiatives and corporate progress tracking, was launched in 2015 and gained market traction over the last decade. The entrenchment of SBTi’s Corporate Net-Zero Standard signaled a powerful shift toward science-based goal setting aligned with the 1.5-degree warming threshold outlined in the Paris Agreement. National leaders gradually followed the trend toward progress-tracking, and COP 28 in 2023 saw the first global stocktake, through which countries showed slow progress toward national emissions reduction goals.
Although this first progress report on emissions reduction goals at the international level fell short of ambitions, it was essential in creating the policies and market mechanisms needed to avert worst-case climate change outcomes. Thanks to the global stocktake, we now know how much we need to accelerate emissions mitigation to reach the ultimate, global goal of cutting emissions in half by 2030. Unfortunately, according to industry experts, “fewer than half of S&P 500 companies reporting to CDP are on track to meet their stated climate targets.”
A founding partner of SBTi, CDP is a leading enabler of transparent emissions reductions and sustainability reporting. Both CDP as a disclosure mechanism and STBi as a reporting standard encourage accountability and facilitate informed decision-making by publicly showcasing company progress, with CDP going so far as scoring sustainability efforts. Leading tech company and household brand HP has improved energy efficiency, increased value chain engagement, and designed products for reduced impact, resulting in a carbon footprint reduction of 18% since 2019, an accomplishment recognized by CDP’s prestigious A-list ranking.
In today’s progress-focused corporate sustainability environment, falling short of goals poses significant risks for organizations. Apart from reputational damage, there is real potential for negative financial impacts. New laws require companies to report their emissions in line with stakeholder pressure. The European Union’s Corporate Sustainability Reporting Directive (CSRD) is set to help standardize EU sustainability reporting metrics and includes an option to report progress toward goals. In California, SB 253 is the first law in the U.S. to mandate reporting of greenhouse gas emissions. As stakeholder expectations continue to evolve, we can expect more stringent, disclosure-focused regulations.
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Going from ambition to implementation
Companies that fail to report on their progress and dedicate resources to achieving goals expose a dangerous vulnerability. Many companies, driven by good intentions, announce emissions reduction goals without a comprehensive roadmap to achieve them. Hitting ambitious targets is hard, and many companies encounter significant challenges, ranging from economic constraints to operational hurdles. As companies confront those obstacles, the best course of action is often adjusting their goals.
Sustain.Life clients regularly have ambitious net-zero goals and our team helps companies adjust their timelines to achieve their goals based on their actual emissions data.
Whether sharing updates about exceeding or falling short of previously set goals, transparency around progress and goal adjustments helps reduce reputational risks. Companies can and should recalibrate their goals as they measure their progress. A prime example? Amazon’s Shipment Zero program. In a recent update, the company shared its Shipment Zero Goal, to make half of all of its shipments carbon neutral by the end of the decade, which came before Amazon joined The Climate Pledge, which sets more ambitious goals by 2040. Replacing one emissions reduction goal with a more comprehensive one is an improvement, and Amazon’s communication of the goal adjustment and reasoning behind it is a positive example of transparency in goal adjustments.
To ensure emissions reduction targets are achievable, businesses should start at square one: assess and measure current emissions and align findings with their business objectives. An accurate emissions baseline is imperative for realistic and attainable targets. Furthermore, businesses have to rigorously evaluate how their goals—typically aimed at growth—will impact their capacity to meet emissions reduction targets. For example, in cases of rapid expansion, businesses must account for increased operational scope (e.g., larger facilities and expanded teams) in emissions projections. In short, businesses must refrain from setting emissions reduction goals until relevant data and anticipated changes are accounted for. This approach is foundational to setting a strategic path toward sustainable growth and environmental responsibility.
The risk of failing to meet sustainability goals is significant, but the risk of inaction is far greater. We have to remember: 2030 is upon us—it’s not some distant dream. Organizations have to transition from goal-setting to decisive action. Transparency, ambition, and accountability will be essential for the journey, guiding companies toward a future where sustainability is not just a goal but a fundamental principle.
Sources
1. United Nations Sustainable Development Goals, “Goal 13: Take urgent action to combat climate change and its impacts,” https://www.un.org/sustainabledevelopment/climate-change/
2. Accenture, “Destination net zero,” https://www.accenture.com/gb-en/insights/sustainability/reaching-net-zero-by-2050
3. Science Based Targets, “SBTi Monitoring Report 2022,” https://sciencebasedtargets.org/reports/sbti-monitoring-report-2022/progress-data-dashboard?year=2022
4. United Nations Climate Change, “Global Stocktake” https://unfccc.int/topics/global-stocktake
5. CDP, “Search and view past CDP responses,” https://www.cdp.net/en/responses?queries%5Bname%5D=
6. CDP, “The A List 2023,” https://www.cdp.net/en/companies/companies-scores
7. Amazon, “Update Regarding Shipment Zero,” https://sustainability.aboutamazon.com/shipment-zero-update.pdf
8. Fast Company, “How Amazon plans to make half of its shipments carbon neutral by 2030,” https://www.fastcompany.com/90309906/how-amazon-plans-to-make-half-of-its-shipments-carbon-neutral-by-2030
