Everyone has a climate target until they get punched in the mouth

Missed targets demonstrate the strengths - and limits - of corporate decarbonisation plans

Photo by Jonathan Tomas on Unsplash

It’s not easy being green. According to Bain & Co., 36% of companies are behind on their direct and indirect emissions targets (known as Scope 1 and 2 emissions), and 51% are lagging on their broader value chain (Scope 3) goals. When big names like Nestle, Microsoft, Procter & Gamble, Unilever and Walmart miss targets or deadlines for reporting or even withdraw from standards like the Science-Based Targets Initiative (SBTi), one could be forgiven for concluding that this whole corporate climate action thing just isn’t working.

There are lots of reasons why missed targets suggest that corporate target-setting remains valuable. But also, why its role in meeting the climate challenge shouldn’t be overestimated.

To begin with, rumours of the death of corporate climate action are much exaggerated. A recent SBTi report revealed that the number of companies worldwide with both its near-term and net-zero climate targets more than tripled since 2023. Nearly 11,000 companies have now either established these recognised SBTi targets or have committed to setting them.

Setting targets for reducing emissions is great, but achieving or beating them is something else entirely. As more companies retreat from their climate targets, it’s worth remembering that no plan survives contact with the enemy. Or, as the boxer Mike Tyson put it, “everyone has a plan until they get punched in the mouth.”

Target-setting is hard and inexact at the best of times, particularly when the technologies and economics impacting climate targets are changing fast. So, it’s to be expected that some targets now seem just too hard, or just too soon. And given the exuberance with which much of the corporate world has jumped on the climate bandwagon over the years, we shouldn’t be surprised that these miscalculations err towards the overoptimistic.

(It’s worth pointing out that there are notable exceptions: shipping company Maersk, for example, has brought its net-zero target forward by 10 years from 2050 to 2040.)

Companies missing targets is disappointing. But it also means they’re at least keeping track. There are elements within the climate movement that tend to suspect any corporate target-setting is greenwashing. To be sure, there will be some companies that were hasty to set targets that have later proved to be unrealistic. But being transparent about falling short keeps the pressure on to do better.

Companies that miss a climate target will invariably have learned from the experience. Failure is feedback that helps identify flawed assumptions, ineffective policies, or unrealistic timelines. This helps lead to more adaptive, resilient climate strategies that are better aligned with science and/or more feasible.

Missing targets may also push companies to rethink supply chains, materials, and energy sources and even reevaluate their entire value chain. A new framework launched at New York Climate Week in September proposes three “spheres of influence” to complement the well-known scopes 1, 2 and 3 of corporate decarbonisation reporting. It recognises that overcoming some of the biggest barriers to companies reaching their climate targets requires broader industry or policy action. As Solitaire Townsend, one of the framework’s authors puts it, “Net zero is a team sport; we win or lose together.”

That suggests one more positive takeaway from missed corporate climate targets. That is, they demonstrate the fundamental limits of corporate action.

The difficulties encountered by companies are a useful reminder that the private sector – notwithstanding companies’ relentless enthusiasm and urge to promote their activities – can’t solve the problem alone. As corporations miss their voluntary targets, the case for setting further mandatory targets and limits – as well as broader, macro-economic climate policies like carbon pricing – gets stronger.

As the science behind the climate challenge gets ever more certain, finding and implementing the most effective solutions becomes more complex. So, next time you read that a company has missed its climate targets, don’t reflexively roll your eyes. It’s well worth digging deeper to understand the economic and political context, and to see what the company says it plans to do about it.

More importantly, don’t write off corporate climate action. Just don’t rely on it to get the job done alone.