More businesses are strengthening their climate commitments, with a significant number increasing their emissions reduction targets rather than scaling them back. A new study by PwC, based on data from CDP, indicates that corporate sustainability efforts are continuing despite concerns about potential slowdowns. The report highlights how even smaller companies are now setting goals, reflecting a deeper integration of climate strategies across industries. This trend suggests that businesses are adjusting their approaches to meet realistic expectations while maintaining a long-term commitment to emissions reductions.
Earlier reports on corporate climate strategies suggested that some companies were backing away from their commitments, citing challenges such as economic uncertainties and regulatory shifts. However, the latest findings indicate that while some adjustments are occurring, the overall trend remains positive. Compared to previous years, there is a noticeable expansion in climate initiatives, with a broader range of businesses setting measurable targets. This reflects a shift in corporate behavior, with more firms recognizing the importance of sustainability efforts beyond short-term pressures.
How are companies adjusting their climate targets?
PwC’s analysis of over 4,100 public companies found that nearly half maintained their decarbonization targets in 2024, while more than one-third increased their ambitions. Only 16% reduced their commitments, often due to recalibrations of previously excessive targets. The report also noted that success rates in meeting targets varied, with 67% of companies on track for Scope 1 and 2 emissions reductions, while only 54% were on course for Scope 3 targets.
What role do smaller companies play in climate action?
Smaller companies are playing a growing role in climate commitments, contributing to an increase in new emissions reduction targets. While the number of companies setting climate goals has risen consistently over the past seven years, the total emissions covered by recent commitments in 2024 declined. PwC attributed this to more small and medium-sized enterprises (SMEs) participating, with the average revenue of companies setting new targets dropping significantly since 2020.
A major factor driving these commitments is the focus on value chain emissions, particularly Scope 3, which includes supplier and customer-related emissions. The report found that 72% of companies are engaging with suppliers, while 67% are working with customers to reduce overall environmental impact. This approach has led to an 80% increase in companies reporting Scope 3 emissions compared to the previous year.
PwC emphasized the role of low-carbon electricity in reducing emissions, with renewable energy shifts accounting for over 40% of Scope 1 and 2 reductions. The report suggested that future progress will likely require greater attention to direct emissions sources, as companies have already made significant strides in transitioning to cleaner energy.
Investments in climate action are also increasing, with companies expecting to allocate more capital and operational expenses to sustainability initiatives by 2030. According to PwC, businesses are seeing financial opportunities in these efforts, as 60% already offer low-carbon products, with potential revenue benefits ranging from 6% to 25% for sustainability-driven offerings.
“Companies are increasingly recognizing the financial and operational benefits of sustainability,” PwC stated in the report, highlighting the link between emissions reductions and cost savings.
Despite concerns about companies scaling back, the data indicates a more nuanced picture. While some firms are adjusting their targets, the overall direction remains positive, with more businesses committing to long-term sustainability goals. The growing participation of smaller companies suggests that climate action is becoming more widespread rather than limited to industry leaders. However, challenges remain, particularly in addressing supply chain emissions and maintaining momentum in emission reductions. Businesses will need to balance ambition with achievable strategies to ensure continued progress.
