A new report reveals 84% of S&P 500 companies have climate targets, but most are failing to reduce emissions. Here’s what employers need to know.
Environmental, Social and Governance (ESG) commitments have become a standard part of corporate strategy. From net-zero pledges to science-based emissions targets, businesses have spent the last several years making increasingly ambitious climate commitments. However, a new report from The Conference Board and ESGAUGE suggests that while climate ambition is widespread, execution remains the real challenge.
The findings show that although 84% of S&P 500 companies now disclose climate targets, the majority have failed to significantly reduce emissions across their operations and supply chains. For employers, HR leaders and executives, the report serves as an important reminder that meaningful sustainability requires more than public commitments. It requires investment, workforce engagement, measurable accountability and long-term planning.
BUSINESSES STRUGGLING TO MEET CLIMATE TARGETS
According to the report, 84% of S&P 500 companies disclosed at least one climate target in 2025. Within that figure:
- 68% have formal emissions-reduction targets.
- 53% have committed to achieving net-zero emissions.
These commitments typically include deadlines such as 2030, 2040 or 2050, reflecting increasing investor, employee and customer expectations around climate responsibility. Yet having a target is proving much easier than achieving it. Despite widespread climate commitments, emissions performance has remained largely unchanged for many organisations.
KEY STATISTICS AROUND SCOPE TARGETS
The research found that 58% of companies with Scope 1 targets (which refer to direct emissions from company operations, including manufacturing facilities, company vehicles and fuel combustion) have reported flat or rising emissions since 2021.
Only 40% of companies with Scope 2 targets emissions (which refer to purchased electricity, heating and cooling), reported flat or rising emissions since 2021. This remains the strongest-performing category as many organisations have been able to improve performance by purchasing renewable electricity and improving energy efficiency.
Scope 3 emissions (which include indirect emissions across an organisation’s value chain, including suppliers, transportation, business travel, product use and waste), remain the biggest obstacle. These emissions often account for the largest share of a company’s overall carbon footprint. Yet 62% of companies with Scope 3 targets report flat or rising emissions since 2021. Because these emissions occur outside an employer’s direct control, they remain significantly harder to measure and reduce.
CLIMATE GOAL PRIORITIES
One of the report’s most striking findings is that many sustainability leaders are uncertain their own organisations will achieve the targets they have publicly announced. Among sustainability executives surveyed only 24% said they were fully confident their organisations would meet their climate targets. Around six in 10 (59%) reported mixed or low confidence.
The report also revealed that climate ambition is increasingly competing with other strategic investments. For example:
- 55% of executives cited cost, capital allocation or return on investment (ROI) as the leading reason climate targets may be delayed or adjusted.
- 45% pointed to changing regulatory requirements.
- 37% highlighted technological readiness.
These findings echo previous research published in Fair Play Talks showing that more than one-third of companies worldwide are already struggling to meet climate targets as investment in artificial intelligence places growing pressure on sustainability budgets.
CLIMATE TARGET CHALLENGES
“Many corporate climate targets are entering a more difficult phase,” noted Andrew Jones, Principal Researcher at The Conference Board and author of the report. “As 2030 moves from a long-term milestone to a near-term deadline, companies may need more capital, clearer execution plans, or recalibration – but recalibration isn’t automatically a rollback. In many cases, it reflects a more realistic assessment of what it will take to achieve those goals.”
The challenge for many companies “isn’t a lack of climate ambition, but competing priorities,” added Brian Campbell, Leader of The Conference Board Governance & Sustainability Center. “Climate investments are increasingly being weighed against AI, infrastructure, and other business-critical initiatives, making capital allocation a defining factor in whether climate targets stay on track.”
Umesh Chandra Tiwari, Executive Director of ESGAUGE, said: “The data show that setting climate targets has become standard practice among large companies. The next challenge is demonstrating measurable progress against those commitments, particularly in the areas where emissions are hardest to reduce and track.”
LESSONS FOR EMPLOYERS
Climate targets are no longer solely the responsibility of sustainability teams. Employees working in procurement, finance, HR, facilities, logistics and operations all influence an organisation’s carbon footprint.
Employers should consider:
- Embedding sustainability into everyday decision-making.
- Upskilling employees on ESG reporting and carbon literacy.
- Assigning clear ownership of climate objectives.
- Measuring and communicating progress regularly.
- Balancing short-term financial pressures with long-term resilience.
These findings reinforce previous reports on Fair Play Talks showing that CEOs increasingly view climate action as a strategic business priority rather than simply a compliance exercise.
Similarly, another study found that nine in 10 CEOs believe the business case for sustainability is stronger than ever, despite increasing economic uncertainty and competing investment priorities.
WHY THIS MATTERS BEYOND ESG
This matters because climate performance increasingly influences:
- employer reputation
- talent attraction
- investor confidence
- procurement decisions
- customer trust
- regulatory preparedness
- long-term resilience
It also has significant financial implications. As previously reported on Fair Play Talks, climate-related risks could cost corporations up to $610 billion annually by 2035, highlighting why many businesses continue investing in sustainability despite current economic pressures.
Sustainability investment is also evolving worldwide. Although many US organisations are reassessing climate investments, approaches differ internationally. For example, the majority of Chinese listed companies are maintaining or increasing climate-action spending (as reported), demonstrating that investment momentum continues in many global markets despite ongoing economic uncertainty.
The report comes as global business leaders continue exploring how organisations can translate climate commitments into measurable action. At the 2026 SDG Business Forum, convened by the UN Global Compact, executives, policymakers and business leaders stressed that stronger partnerships, accountability and private sector collaboration will be essential if businesses are to meet sustainability commitments before 2030.
WIDENING GAP BETWEEN EMISSIONS AND REDUCTIONS
The report highlights a widening gap between climate ambition and measurable emissions reductions. While 84% of S&P 500 companies now publish climate targets, most organisations continue to struggle with reducing Scope 1 and Scope 3 emissions, and only 24% of sustainability leaders are fully confident they will meet their goals.
For employers, the message is clear: ambitious climate commitments must be backed by realistic investment, accountable leadership and an engaged workforce. As 2030 draws closer, organisations that focus on measurable progress – not just public pledges – are likely to be better positioned to meet stakeholder expectations, attract talent and build long-term business resilience.
CLIMATE TARGETS: FREQUENTLY ASKED QUESTIONS
What are Scope 1 emissions?
Scope 1 emissions are direct greenhouse gas emissions produced from company-owned operations such as manufacturing facilities, fuel combustion and company vehicles. The report found 58% of companies with Scope 1 targets have reported flat or rising emissions since 2021.
What are Scope 2 emissions?
Scope 2 emissions are indirect emissions from purchased electricity, heating and cooling. They represent the strongest area of progress, with 40% of companies reporting flat or rising emissions.
Why are Scope 3 emissions difficult to reduce?
Scope 3 emissions occur throughout a company’s value chain – including suppliers, transportation, product use and waste – and are much harder to control because they sit outside an organisation’s direct operations. 62% of companies with Scope 3 targets reported flat or rising emissions.
Why are companies delaying climate targets?
According to the report, 55% of executives cited cost, capital allocation or ROI as the main reason organisations may delay or adjust climate targets, followed by changing regulations (45%) and technological readiness (37%).
Why should employers care?
Climate performance increasingly affects recruitment, retention, investor confidence, customer trust and corporate reputation. Organisations that integrate sustainability into workforce planning and everyday operations are better positioned to meet stakeholder expectations while improving long-term resilience.
RELATED ARTICLES
Despite AI accelerating global business transformation, a growing number of companies are struggling to meet their climate targets, according to research.
CEOs worldwide are putting climate and environmental action at the heart of their long-term business goals.
Nine in 10 global chief executives now say the business case for sustainability is stronger than it was five years ago, and almost all plan to maintain or expand their commitments, according to study.
Businesses that fail to adapt to mounting climate risks could see annual losses of up to $610 billion by 2035, according to WEF.
More than 60% of Chinese onshore listed companies plan to maintain or increase investments in climate action and emissions reduction initiatives, according to white paper.
Sign up for our newsletter
