How to view climate target failures

What happens when companies break their climate promises? Almost nothing. A new study has uncovered troubling truths about corporate climate commitments. Out of 1,041 companies with emissions reduction targets set for 2020: -9% (88 firms) openly failed to meet their goals. -31% (320 firms) stopped reporting on their targets without explanation. What happens when companies miss these targets? Practically no consequences: -Only three failed companies faced media scrutiny. -No significant market backlash, media sentiment shifts, or ESG rating downgrades. In contrast, companies were rewarded with positive press and improved ESG ratings simply for announcing these targets. The bigger issue: This accountability gap threatens the credibility of ambitious 2030 and 2050 climate pledges. Unlike financial targets, which are rigorously monitored, emissions goals often exist in a vacuum—without oversight or real consequences for failure. Interestingly, the study found that: -Firms in common-law countries and those with stronger media accountability had better success rates. -High-emitting sectors like energy and materials struggled the most, with the highest rates of "disappeared" targets. With more companies backing away from climate action, we cannot afford to let this cycle continue. It’s time for corporate sustainability leadership to move beyond announcements and deliver measurable, transparent results. Accountability mechanisms—demanded by both regulators and stakeholders are urgently needed. A great piece of work by Xiaoyan Jiang, Shawn Kim, and Shirley Simiao Lu! Let’s learn from these insights to ensure that corporate climate pledges actually deliver. #climatechange #netzero #esg

Remember those bold corporate climate commitments? Yeah… about that Lately, I’ve noticed a worrying trend—companies quietly walking away from their climate pledges, hoping no one will notice. In New Zealand, several firms have dropped out of the Science Based Targets initiative (SBTi) without a word. No announcements. No explanations. Just… gone. And they’re not alone. Globally, over 200 major companies—including Microsoft, Unilever, and Walmart—were recently delisted from SBTi for failing to follow through. Meanwhile, financial giants like Citigroup and Bank of America have exited the Net-Zero Banking Alliance. So, what’s going on? And why should we care? Why are companies backing out? Many signed up for climate commitments when the pressure was high—investors, customers, and employees were demanding action. But now, with economic challenges, changing regulations, and less scrutiny, some are quietly retreating. Decarbonization isn’t easy. It takes investment, structural changes, and real effort. But instead of being transparent about their struggles, companies are just… disappearing from these initiatives. Why does this matter? When companies break their climate promises, it’s not just disappointing—it’s dangerous. 1️⃣ It erodes trust – If companies can make big sustainability claims and walk away without consequences, how do we know who’s serious? 2️⃣ It slows down progress – If major corporations backtrack, it signals to others that climate action is optional. 3️⃣ It risks greenwashing – These commitments often drive PR and goodwill. But if there’s no accountability, it becomes all talk, no action. What should companies do instead? Backing out isn’t the problem—silence is. If companies are struggling to meet targets, they should: ✔️ Be transparent about the challenges ✔️ Adjust their strategy, rather than abandon it ✔️ Engage with stakeholders to find real solutions What can we do? As consumers, employees, and investors, we have power. We can: 💡 Ask companies tough questions about their progress 💡 Support businesses that are serious about sustainability 💡 Push for policies that make climate commitments enforceable #sustainability #greenhushing #esg

I have gradually lost much faith in net-zero target setting. I don’t write this lightly. NZ pathways are rooted in the Paris Agreement’s carbon-budget logic and the effort to avoid runaway climate change beyond +1.5°C. I have invested a lot in this agenda by contributing to the creation of several NZ alliances, supporting initiatives such as GFANZ, TCFD and SBTi, helping define and implement AXA’s NZ strategy, and later developing research and advising clients on their NZ journey while at MSCI. Since the launch of the NZAOA in 2019, I knew these targets were ambitious, but I advocated for them technically and passionately, with a genuine sense of urgency. Then came the post-COVID return to BAU, the 2022 energy crisis, the ESG / climate backlash since 2024, a looming new energy crisis and the growing disconnect between net-zero pathways and the trajectory of the real economy. Despite progress in some areas, NZ remains economically and politically out of reach in many sectors — “hard to abate” is still very much hard to abate. Two recent articles helped me reframe the issue (links below). Frédéric Ducoulombier argues that when NZ targets fail, the problem lies less with the frameworks than with the systems in which they operate. Christophe Jospe goes further by questioning the reliance on marginal abatement cost curves. These curves assume decarbonization is a sequence of rational, cost-optimizing decisions: identify mitigation options, estimate the cost per ton of avoided emissions, and implement them from cheapest to most expensive. But this framework breaks down when transitions require system-wide change. EVs, CCS, electrification or new energy networks require simultaneous commitments across supply chains, infrastructure providers, industrial users and governments. Without coordination, even viable technologies struggle to scale. Individual investments can appear irrational even if the system would work once built. The real bottleneck is therefore often not cost but coordination. Beyond carbon pricing or subsidies, governments and investors may need to prioritize coordination tools such as industrial policy, infrastructure planning, PPPs, demand guarantees or long-term offtake agreements. This is precisely what some infrastructure investors do when they focus on long-term assets, PPPs and shared infrastructure rather than individual technologies. By financing the backbone assets that allow ecosystems to emerge, they help solve the coordination problem. Perhaps I have spent too much time viewing the transition through the lens of listed markets and portfolio-level net-zero metrics. Some of the most powerful levers may lie instead in building real-world systems and infrastructures. It may be time to shift the NZ debate away from firm-level targets toward system-level progress — even if attribution becomes harder.  

EU Member States are currently revising their National Energy and Climate Plans (NECPs), where they are expected to increase their ambition, strengthen their planning, and define concrete mitigation pathways to implement the EU’s long-term climate and energy objectives, including a net 55% reduction in greenhouse gas emissions by 2030 (compared to 1990 levels).   🌍 This is a crucial opportunity to ensure that the EU can collectively achieve its long-term objectives, particularly in light of the EU’s international commitments under the Paris Agreement and the need to keep the 1.5°C threshold within reach.   ⚠ However, the EU is not on track to achieve its own mitigation targets. In particular, not a single draft NECP submitted to the Commission appears to be fully compliant with legal requirements and expectations under EU law. The Climate Litigation Network's benchmarking assessment of Member States’ draft updated NECPs highlights several substantive shortcomings:   ❌ None of the Member States’ NECPs are fully consistent with legal requirements and expectations under EU law on issues including: renewable energy; energy efficiency; land use, land use change and forestry (LULUCF); and overall emission reduction targets covering sectors outside of the EU Emissions Trading System.   ❌ The draft NECPs also reveal a widespread lack of transparency in respect of legal requirements and expectations on the phaseout of fossil fuel subsidies.   🔴 These failures risk jeopardising the implementation of Europe’s long-term climate mitigation efforts and may delay the achievement of the EU’s binding climate neutrality objective. If the EU fails to achieve its climate goals, this will have grave implications for the world’s collective ability to limit global temperature rise to 1.5°C, with significant repercussions on the enjoyment of human rights and fundamental freedoms in Europe and beyond.   ⚖ Member States still have an opportunity to correct these deficiencies in the final version of their NECPs, due 30th June 2024. A failure to correct shortcomings in time may render Member States’ final NECPs incompatible with legal obligations and expectations under EU law, giving rise to the potential for infringement proceedings by the European Commission or domestic legal challenges.    ➡ Link to the Report: https://lnkd.in/daBSkb88

How easily numbers can fool s (Even in the impact sector🥲) Some days, your worldview changes simply because you slept badly or skipped lunch. If our own minds can misread reality so quickly imagine what happens inside a 50-page impact report! Across education, gender, and climate, I’ve seen numbers tell beautifully convincing stories that later fail not because teams lacked integrity, but because the measurement itself was fragile. The problem isn’t data. It’s the illusions we build around data. Here are 10 places where impact numbers routinely mislead 1. “Before-after” without asking before what? After what? A girl’s attendance rises in winter? Great! but winter is harvest off-season. Climate: emissions drop during monsoon? Naturally. 2. When small samples pretend to speak for entire regions A pilot with 200 households cannot predict outcomes for 2 million. Especially in climate-sensitive geographies. 3. When one district quietly skews the entire story Education and gender pilots often rely on strong local champions 🙏🏼remove one person and numbers fall apart. 4. When baselines are taken during seasonal extremes A climate project measuring water stress right after the rains will look successful no matter what the intervention is. 5. When indicators are too abstract to mean the same thing everywhere “Women’s agency” in India ≠ “women’s agency” in Africa. Same with “climate resilience” across coastal vs dryland regions. 6. When attribution is assumed, not proved If three NGOs, a government scheme, and a cyclone all hit the same area in the same year who caused what? 🥹 7. When negative externalities are ignored A clean-cooking solution that increases plastic canisters. A solar pump that unintentionally boosts groundwater extraction. 8. When targets are too ‘neat’ for messy realities Education: 100% foundational literacy targets. Climate: fixed adaptation KPIs for landscapes where rainfall patterns now shift every month. 9. When tools are too complex for field teams Apps that never load in low network zones. Survey forms that take 45 minutes. Remote sensing dashboards no one can interpret. 10. When success is defined only by what’s measurable Not everything that matters can be counted such as mindset shifts, trust in institutions, or local political buy-in. Impact numbers are useful but they are not neutral. They are shaped by seasons, incentives, human behaviour, data quality, political pressures, and sheer randomness. If we want real progress in education, gender, climate or anything else, we need a sector that reads data with context, humility and curiosity not blind confidence. If you want help making your team’s metrics sharper, clearer, and harder to misinterpret, I’m happy to engage. #ImpactMeasurement #ClimateAction #Education #GenderEquality #Leadership #MonitoringAndEvaluation #SocialImpact

84% of carbon credits fail to deliver their promised reductions. I spent 3 years figuring out why - and how to spot the 16% that actually work: Three years ago, I watched a Fortune 500 sustainability director discover that €2.3 million in carbon credits they'd purchased were worthless. How was this possible? The projects only existed on paper. Satellites showed the "protected" forest had been cleared months earlier. That moment launched my deep-dive into carbon credit quality. Since then, I've analysed thousands of transactions across 47 registries, and I've condensed everything into a 5-day email course that cuts through the complexity. The reality I’ve uncovered supports what peer-reviewed studies confirm:  Most companies are buying expensive fiction, not climate action. The math is brutal. When 84% of credits fail, a €1m offset budget = €840k in wasted climate investment.  Teams celebrate net-zero targets while emissions remain unchanged.  Then investigative journalists start calling. Major brands have seen their social sentiment plummet overnight after carbon offset exposés. The failures can be traced to three causes:  🚩 Procurement teams prioritise cost/tonne, choosing €3 credits over €40 ones. 🚩 Verification lags by years, creating dangerous gaps between payment and truth. 🚩 Registry listings hide quality gaps - €3 hydro credits and €40 reforestation projects aren't comparable, yet they appear together on spreadsheets. My 5-day email course tackles this systematically. We dig into the engineering reality behind carbon credits - the methodologies, baselines, and calculations that determine real impact. Day 1 starts with a 5-point audit framework to evaluate any carbon credit. Comment “carbon” to get the link.

Sad state of affairs but this needs to be said: it's noble and needed for companies to set 1.5° C aligned climate transition plans and #sustainability targets. That said, and I wish it weren't so, we need to be honest and realistic about the challenge at hand. Setting a 1.5° C climate target means you are committing to do *much* better than average, because average is completely failing us. 2023 was the warmest year ever recorded. 2024 is hotter. The rate of warming is accelerating. And we are not reducing total yearly global emissions. Global average temps for January-September 2024 reached 1.54° C (±0.13°C). That's already north of 1.5°. If you're setting a 1.5° C target as a company in 2024, it's a high bar to live up to and make happen. At the same time, it's the level of ambition we need. Separately, I suspect a lot of existing targets will be restated over the next 1-2 years due to CSRD assurance, but that's a separate story. While many standards providers and target-setting firms still anchor to 1.5° C, as business practitioners (and society), we need plans and scenarios for 2-3°, with the adaptation, investment, damage control, and resilience that's going to require. Above all, we need action that aligns to reality (not assumptions in a PDF), real feasibility understanding, and the guts to tell each other (and other leaders) the truth about what it's going to take to get there. Otherwise a climate target is just a dream or wishful thinking, not a roadmap from A to B

𝗔𝗻 𝗮𝗿𝘁𝗶𝗰𝗹𝗲 𝗳𝗿𝗼𝗺 𝗕𝗹𝗼𝗼𝗺𝗯𝗲𝗿𝗴 𝗼𝗻 𝗮𝗯𝗮𝗻𝗱𝗼𝗻𝗲𝗱 𝗰𝗼𝗿𝗽𝗼𝗿𝗮𝘁𝗲 𝗰𝗹𝗶𝗺𝗮𝘁𝗲 𝗽𝗹𝗲𝗱𝗴𝗲𝘀 𝗶𝘀 𝗴𝗲𝘁𝘁𝗶𝗻𝗴 𝗮 𝗹𝗼𝘁 𝗼𝗳 𝗮𝘁𝘁𝗲𝗻𝘁𝗶𝗼𝗻 𝗼𝗻 𝗟𝗶𝗻𝗸𝗲𝗱𝗜𝗻. 𝗪𝗵𝗮𝘁'𝘀 𝗺𝗶𝘀𝘀𝗶𝗻𝗴 𝗳𝗿𝗼𝗺 𝘁𝗵𝗲𝘀𝗲 𝗱𝗶𝘀𝗰𝘂𝘀𝘀𝗶𝗼𝗻𝘀 𝗶𝘀 𝘁𝗵𝗲 𝗿𝗼𝗼𝘁 𝗰𝗮𝘂𝘀𝗲 𝗼𝗳 𝘁𝗵𝗲𝘀𝗲 𝗳𝗮𝗶𝗹𝗶𝗻𝗴𝘀 𝗮𝗻𝗱 𝗵𝗼𝘄 𝘁𝗵𝗶𝘀 𝗰𝗮𝗻 𝗯𝗲 𝘁𝘂𝗿𝗻𝗲𝗱 𝗮𝗿𝗼𝘂𝗻𝗱. What the article missed is that this is really about the fragility of climate ambition when not rooted in governance, capital allocation, or executive accountability. This is not because net-zero pledges are too ambitious, but because sustainability remains siloed from business strategy. 𝗖𝗹𝗶𝗺𝗮𝘁𝗲 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝘆 𝗶𝘀 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝘆. 𝗔𝗻𝘆𝘁𝗵𝗶𝗻𝗴 𝗹𝗲𝘀𝘀 𝘄𝗶𝗹𝗹 𝗳𝗮𝗶𝗹. This isn’t just a retreat from climate ambition; it’s a signal to investors that these businesses never took climate action seriously. Firms that haven’t integrated sustainability into their model are rudderless and vulnerable to every gust of political or market pressure, drifting on an open ocean. 𝗙𝗿𝗼𝗺 𝗡𝗲𝘁 𝗭𝗲𝗿𝗼 𝘁𝗼 𝗡𝗲𝘁 𝗡𝗼𝘁𝗵𝗶𝗻𝗴 When climate goals are voluntary, they’re also expendable. When targets live on the CSR page but not in the boardroom, they will crumble with the first wave.  And as climate risks intensify, so does the cost of superficial action. Businesses built on solid foundations will weather the storm. The illusion of progress with promises is now more dangerous than inaction. 𝗖𝗹𝗶𝗺𝗮𝘁𝗲 𝗿𝗶𝘀𝗸 𝗶𝘀 𝗿𝗶𝘀𝗶𝗻𝗴 𝗼𝗻 𝗮𝗹𝗹 𝗳𝗿𝗼𝗻𝘁𝘀 Corporate action must now match the reality of systemic, compounding risks from both physical and transition risks. Companies must: 🔸 𝗘𝗺𝗯𝗲𝗱 𝗰𝗹𝗶𝗺𝗮𝘁𝗲 𝗶𝗻𝘁𝗼 𝗳𝗶𝗱𝘂𝗰𝗶𝗮𝗿𝘆 𝗱𝘂𝘁𝘆—not as a compliance issue, but as a material risk 🔸 𝗜𝗻𝘁𝗲𝗴𝗿𝗮𝘁𝗲 𝘀𝘂𝘀𝘁𝗮𝗶𝗻𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗶𝗻𝘁𝗼 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝘆—from capex and incentives to stakeholder engagement and supply chain operations 🔸 𝗕𝗮𝗰𝗸 𝘄𝗼𝗿𝗱𝘀 𝘄𝗶𝘁𝗵 𝗱𝗮𝘁𝗮—verified disclosures, science-based targets, and third-party assurance 𝗠𝘆 𝗧𝗮𝗸𝗲 The collapse of voluntary climate pledges is not the failure of ambition—it’s the failure of integration. We’re moving into a phase where climate leadership will be defined not by what is promised, but by what is embedded. The firms that internalise climate risk as a governance issue will be better positioned to navigate volatility, secure capital, and build trust. It's time to treat climate as you would any other threat to the business, measure it, model it, and manage it. Resilience isn’t a nice-to-have. It’s now the price of long-term relevance. Source: https://lnkd.in/e5BiCnD5 #NetZero #ClimateRisk #ESG #Sustainability  #Resilience #Governance #CorporateStrategy #Leadership #Bloomberg ____ 𝘛𝘰 𝘴𝘦𝘦 𝘮𝘰𝘳𝘦 𝘰𝘧 𝘮𝘺 𝘱𝘰𝘴𝘵𝘴 𝘪𝘯 𝘺𝘰𝘶𝘳 𝘧𝘦𝘦𝘥, f𝘰𝘭𝘭𝘰𝘸 𝘮𝘦 𝘰𝘯 𝘓𝘪𝘯𝘬𝘦𝘥𝘐𝘯: Scott Kelly

Let me take one step back and look at SBTi as a symptom of 𝐚 𝐝𝐞𝐞𝐩𝐞𝐫, 𝐬𝐲𝐬𝐭𝐞𝐦𝐢𝐜 𝐩𝐫𝐨𝐛𝐥𝐞𝐦: voluntary action, by design, can never scale fast enough nor be uniformly ambitious enough to meet global climate goals. We need to address this as the new Science Based Targets initiative corporate net zero standard evolves and undergoes public consultation (-> https://lnkd.in/ehTPkDi5 ) When ambition is purely voluntary, those companies willing to lead are penalized by competitors who opt for incremental or minimal efforts. Without a level playing field, “early movers” on deep decarbonization face higher costs, greater disclosure burdens, and supply chain friction, while laggards benefit from business-as-usual inertia. This asymmetry stifles collective progress, regardless of how refined the voluntary approaches and standards become. Ultimately, voluntary frameworks such as SBTi, no matter how technically sophisticated, will always bump against this ceiling: without regulation or a binding global mechanism, the incentives for companies to go "all in" on decarbonization remain uneven and fragmented. So, while SBTi Version 2.0 is indeed ‘bigger, bolder, and more transparent,’ it misses to expose that voluntary, corporate-driven action alone cannot deliver the structural changes needed to meet the climate crisis at scale and speed. A horribly sobering case is of Amazon: financing  SBTi & kicked out of SBTi in 2023 & increasing emissions by 40% since since establishing a net zero target & starting its own carbon credit scheme for which it self cannot meet the participation criteria; see the hair raising details: https://lnkd.in/emHpc96R So to me the  real question is this: Will – and can – the theory of change behind SBTi deliver the decarbonization required to stay well below 2°C, as pledged in the Paris Agreement? Or will the limits of voluntarism prove, once again, that ambition without enforcement cannot close the emissions gap? On that note, Mark Trexler and I dive deeper into this failure of ‘theories of change’ aspect in our latest Climate Change on LinkedIn Newsletter (-> https://lnkd.in/egXtMjj3 ). Worth a read & subscribe ( we accept carboncredits, just kidding – it is free) if you do not want to miss 𝐜𝐥𝐢𝐦𝐚𝐭𝐞 𝐜𝐡𝐚𝐧𝐠𝐞 𝐫𝐞𝐥𝐚𝐭𝐞𝐝 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐢𝐨𝐧𝐬, 𝐝𝐞𝐜𝐢𝐬𝐢𝐨𝐧𝐬, 𝐚𝐧𝐝 𝐛𝐫𝐞𝐚𝐤𝐭𝐡𝐫𝐨𝐮𝐠𝐡𝐬. Let me also suggest two thoughtful & action-oriented initial reflections on the SBTi draft: Alexia Kelly's : https://lnkd.in/eij5dxse & Toby Green's https://lnkd.in/eUTq3bUA

Following my previous post about the 1.5°C failure, new statistics have been released that confirm the scale of the challenge ahead. The latest UNEP-WCMC Emissions Gap Report 2025 provides a clearer picture of where we stand as COP30 begins. The numbers are not political. They are physical. And they confirm a trajectory that will redefine how we design, operate, and retrofit buildings for the rest of the century. Ten years after Paris, the 1.5°C pathway is effectively gone. 📌 Current policies → +2.8°C 📌 All conditional NDCs fully delivered → +2.3°C 📌 Even with all net-zero pledges honoured → +1.9°C The likelihood of staying below 1.5°C ranges from 0% to 21% depending on the scenario. For many regions, overshoot is no longer an exception, it is the baseline. This has direct engineering consequences: • Outdoor conditions become more extreme → higher cooling and heating loads • System efficiency declines → chillers, boilers, fans, pumps operate further from ideal COP • Envelopes designed for a milder climate underperform • Operational drift becomes structural • Retrofits must compensate for a moving climate target From a systems perspective, the equation becomes tougher each year: How much efficiency must we add just to offset harsher outdoor conditions? And how much more must we add to stay aligned with annual net-zero trajectories? Most assets are not designed for this double requirement: (1) maintain comfort under more severe extremes (2) reduce total energy and carbon simultaneously Missing 1.5°C was the easy failure. Staying below 2°C will require deeper retrofits, stronger envelopes, precise control, and disciplined operation. The climate will not hold its side of the equation. We have to hold ours. 📌 Decarbonisation is now a race against physics, not policy. 🔗 Follow Yann Defrance for grounded reflections where climate scenarios meet plant room reality. ♻️ Like, comment, or share if you believe resilience starts with accepting the numbers. Full UNEP report: https://lnkd.in/g7vFuDGJ #Decarbonisation #NetZero #EnergyEfficiency #BuildingPerformance #ClimateChange #ESG #Sustainability #Commissioning #Retrofit #OperationalExcellence