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Key Points
- With 2025 climate targets closing and 2030 milestones ahead, many companies are facing mixed progress, rising external pressures, and increased internal scrutiny around the value and feasibility of their climate strategies.
- The targets set today will shape a critical decade of delivery. When carefully designed and calibrated, climate targets can protect and create shareholder value, reduce legal and operational risks, and build resilience.
- In BSR’s latest edition of Insights+, the Climate and Nature team explores current headwinds, how members are responding, and actions businesses can take in a rapidly evolving landscape.
Climate Targets at a Crossroads
Climate targets have stepped to the forefront of corporate sustainability teams’ priorities in 2026, as the first full cycle of corporate commitments ends and companies reflect on what’s next. With 2025 targets closing and 2030 milestones approaching, many companies are confronting mixed progress, increasing external pressures, and growing internal scrutiny around the value and feasibility of their climate strategies amid a shifting policy, business, and guidance landscape.
Now is not the time for retreat but recalibration. The challenge is no longer whether companies should set climate targets, but how to evaluate what has and has not worked so far and develop a new generation of targets that are credible, practical to implement, and closely aligned with corporate priorities to strengthen business value and resilience.
In BSR’s latest edition of Insights+, the Climate and Nature team explores current headwinds, how BSR members are responding, and actions businesses can take in a rapidly evolving landscape.
Current Headwinds for Climate Targets
Following a decade marked by a rapid increase in the number of companies adopting climate targets and the launch of the Science Based Targets initiative (SBTi), the first full cycle of near-term targets is now drawing to a close. While many companies have made significant progress, some have reported falling short of their 2025 milestones, and others are increasingly concerned that their 2030 targets may be out of reach. The reasons for such mixed results are multiple:
- Slow government and system-level change: Many companies remain dependent on energy systems that continue to rely heavily on fossil fuels, while policies designed to incentivize the transition to cleaner energy and support broader climate action are lagging—or, in some key geographies, being rolled back.
- A complex methodological landscape: Voluntary standards, such as the GHG Protocol and SBTi, have long been cornerstones in corporate climate action. However, the evolving guidance has often been difficult for companies to navigate, creating additional uncertainty and administrative burden without consistently improving outcomes. For example, updated rules, including the release of SBTi’s new Net-Zero Standard V2 and of ISO’s Net Zero Standard V1 in 2026, as well as updates to the GHG Protocol’s Scope 2, Scope 3, and market-mechanisms guidance in 2026-2027, are set to bring additional alignment but are currently challenging to navigate.
- Internal implementation challenges: Climate action is frequently perceived internally as an extra cost and sustainability teams face challenges in translating it into business benefits when aligning with other business functions, from procurement to finance to C-suite. This is due in large part to a narrative dissonance, with the value of sustainability needing clear framing in business terms and a focus on minimizing harm without, in parallel, thinking strategically about the climate and energy transition as an opportunity for business growth.
Pressures on companies are intensifying, with geopolitical polarization, legal challenges, and political pushback increasingly challenging climate target frameworks, such as SBTi. In some markets, public commitments carry reputational and legal risks, and the credibility of long-term net-zero targets is being challenged. In other markets, investor, regulatory, or customer pressure on climate targets has softened. Globally, a range of changes in the current context has crowded the business agenda. As a result, companies are experiencing increased scrutiny from leadership, a heightened need to make the “business case” for climate action, and growing reluctance to communicate publicly, including regarding the disclosure of goals.
The Business Case for Climate Action Remains
At the same time, physical climate risks are increasingly manifesting across supply chains while transition risks continue to vary significantly across jurisdictions. Climate action remains essential to business resilience, and the ongoing transition continues to present significant opportunities that can drive business value and competitiveness. Companies that invest early in decarbonization, energy efficiency, renewable energy, and supply chain resilience are often better positioned to manage volatility, reduce costs, strengthen stakeholder confidence, and capture opportunities in rapidly expanding low-carbon markets.
This is reflected in the continued uptake of SBTi targets. The number of companies with validated near-term SBTi targets nearly doubled (+97%) between the end of 2023 and mid-2025, while the number of companies with both near-term and net-zero targets increased by 227% over the same period. According to the latest SBTi Tracker (April 2026), the number of companies with validated science-based targets grew by 40% in 2025 compared with previous years. As of February 2026, more than 10,000 companies had validated targets—up from none in 2015 and approximately 8,000 in 2025—while over 13,000 companies had committed to developing a target. Increasingly, Asia is emerging as a major driver of corporate climate action and SBTi adoption.
Future-Proofing Climate Targets in a Shifting Landscape
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Topics
BSR is engaged in several conversations with members who are evaluating if and how to reframe, review, or update their targets for the next cycle.
The targets set today will shape a critical implementation period over the next decade. When carefully designed and calibrated, they can help protect and create shareholder value while reducing legal and operational risks. Conversely, stepping back from climate targets altogether may increase exposure to material and physical climate risks and cause companies to miss significant opportunities arising from the energy and climate transition.
Many companies are reaching the limits of what they can achieve through internal action alone, exposing a gap between current corporate commitments and system-level change. This is forcing a reevaluation of how climate strategy links to business value—cost, growth, risk, and competitiveness—rather than compliance or signaling alone.
Standards will continue to play a critical role but their function is evolving. SBTi and emerging frameworks like ISO Net Zero remain essential for credibility, comparability, and alignment with science. However, how targets are set and implemented might shift from end-point numerical values to a broader toolkit of measures, combining externally validated targets with flexible, business-aligned approaches.
In this context, the question is no longer whether to have targets—but how to design them so they are credible, actionable within the company, and closely linked to business outcomes.
How Are BSR Members Responding?
BSR sees businesses engaging with and evaluating the evolving guidance from established climate standards, as well as exploring the strengths and current challenges of emerging frameworks.
There is recognition that established, externally verified frameworks, like SBTi and the upcoming ISO Net Zero Standard, will continue to play a foundational role in driving long-term transformation. In parallel, complementary approaches are emerging that focus not only on decarbonization, but also on broader contributions to global climate goals, such as Mirova’s Climate Contribution Framework and other “solutions-focused” models which encourage companies to set dual targets covering emissions reduction and positive impact through products, financing, and policy influence.
Approaches such as conditional targets are helpful to conceptually separate near-term reduction across scopes from wider approaches that unlock systemic levers of change, such as policy engagement.
In parallel, some approaches rely less on external verification and more on practical or contextual goal-setting, including regional targets, short-term five-year operational targets linked to business planning cycles, and portfolio-based targets across multiple transition pathways, such as those promoted by the Net Zero Asset Owner Alliance (NZAOA) for financial institutions. BSR also observes growing interest in integrated cross-topic targets aligned with broader business outcomes, and in some cases a shift in focus towards collaboration and scaling solutions rather than target-setting itself.
What Can Business Do Next?
In this evolving landscape, companies need to move from climate target-setting as a compliance or reporting exercise to climate targets as a strategic driver of business value. BSR suggests companies can take the following actions today:
1. Engage in a critical strategic exercise to understand the purpose and definition of success of your targets, based on company and delivery realities and acknowledging gaps without undermining ambition. Critically reflect on your leverage and influence and plan accordingly about the best levers for advancing action that supports business value—clearly articulating how target outcomes shape financial performance, risk management, supply chain strategy, and growth opportunities, particularly as climate impacts and market shifts accelerate.
2. Adopt a multifaceted approach to climate action. This means continuing to leverage leading standards while complementing them with additional delivery mechanisms. The goal is not to replace standards, but to use them as one component of a broader strategy that more easily translates to business implementation. Moving from climate-only to integrated targets is an option for this.
3. Engage with the evolving landscape and foster collaboration. As climate target frameworks evolve, it is important for companies to understand what changes, what emerges, and why—engaging with standard-setters and peers. Collaboration also emerges as a critical complement or alternative to setting individual targets on specific topics.
4. Invest in governance and narrative. As scrutiny increases, the ability to clearly articulate the purpose of targets (not in climate terms, but in business language), explain trade-offs, and demonstrate progress (even if imperfect) will be essential for maintaining trust. In a volatile environment, credibility will depend less on perfection and more on transparency, adaptability, and sustained action. Strategic scenario planning is a tool that can help companies plan amid volatility.
Conclusion
Climate targets are at an inflection point—they are not going away; they are evolving. As companies move further from the previous phase of ambition-setting to pragmatic implementation, targets must function as practical tools that guide business decisions, enable delivery, provide a common roadmap for different functions, and connect directly to business value.
The next cycle of climate targets comes at a critical juncture to deliver business and global goals, and getting them right will reduce business risk while unlocking economic opportunities. Companies that succeed in this next phase will be those that treat targets as part of a broader strategy, combining the ambition of key standards with flexible approaches, intentionally applying different levers to systemic and company-specific issues, and focusing relentlessly on the right internal implementation structures. The challenge ahead is not whether to set targets, but how to make them work in practice.
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