Maintaining Healthy Skepticism on Corporate Climate Claims

Climate change is a serious threat we can no longer ignore; not now, and not for many years to come. The crisis is marked by increasingly frequent extreme weather events worldwide and a range of other destructive, even catastrophic, impacts. The scale of this crisis—described as the world’s largest market failure—urgently demands coordinated action from governments, society, and, most importantly, the business sector to reduce emissions to net zero or even negative levels. In this case, what is the most appropriate way to view corporate climate claims?

Growing Skepticism of Corporate Climate Claims

Amid mounting pressure from consumers, shareholders, and regulators, major corporations around the world seem to be racing to make climate pledges. Thousands of companies have joined global climate campaigns, making climate commitments a standard practice. However, despite this wave of pledges that has been going for years, I sense a growing skepticism among experts and activists.

On one hand is the acceleration of corporate climate claims; on the other is the fragmentation of approaches and lack of regulatory oversight. This contradiction creates a landscape so murky that it is often difficult to distinguish authentic climate leadership from intrusive greenwashing. In my opinion, the most important question to ask in this situation is: are these corporate promises actually backed by concrete actions aligned with the urgency based on science? The short answer is: no.

A critical analysis of data and trends reveals a worrying gap between seemingly ambitious rhetoric and slow implementation. In the midst of this crucial decade, it is important that we scrutinize these claims and demand greater accountability—and the two reports I will explore below can teach us much about that.

CCRM 2025: Waning Ambitions and Targets

The NewClimate Institute’s Corporate Climate Responsibility Monitor 2025 (CCRM) report provides an in-depth analysis that reveals structural problems in corporate climate strategies. The CCRM highlights how corporate climate claims are often undermined by incomplete disclosures, misleading accounting practices, and a lack of progress on crucial sectoral transitions. From this comprehensive analysis of 55 large multinational corporations, we can draw five key lessons that emphasize the need for skepticism.

First, 2030 emission targets are losing their meaning. Midway through the decade, companies’ collective ambition for these targets—once strongly emphasized—is waning. The CCRM report finds that the emissions targets submitted by the majority of companies for 2025 are increasingly inadequate to guide or assess meaningful sectoral transitions.

The data itself struggled with incomplete emissions disclosures and poor accounting practices at the industry level, among others. These various obstacles made it increasingly difficult to understand the true level of emissions reductions companies aim to achieve over the next five years. The report was unable to identify and compare the 2030 target ambitions to the 2019 baseline for about one-third of them. This suggests that mid-century GHG emissions targets are no longer fit for purpose in driving meaningful reductions, particularly in sectors with significant Scope 3 emissions, which many companies are likely to indefinitely postpone.

CCRM 2025: Accounting Malpractice and Vague Progress in Sectoral Transitions

Second, malpractices in sectoral emissions accounting obscure the true reality. In the food and agriculture sector, many targets stated by companies in the sector are scientifically inaccurate. Furthermore, companies are relying more on land-based carbon removals to meet their targets and conceal a lack of action on key emission sources like methane.

In the technology sector, companies depend heavily on outdated and potentially misleading market-based accounting. This allows them to claim emissions reductions even though they may not have reduced their location-based emissions at all.

The apparel sector also relies on similar practices and often frames biomass as a clean fuel, even though biomass is not an emission-free energy source. Meanwhile, automotive manufacturers consistently underreport their vehicles’ in-use emissions. These practices highlight the need for greater clarity and consistency in accounting methodologies to ensure credibility.

Third, CCRM analysis indicates that companies’ progress on sectoral transitions is very limited, with significant transparency issues in reporting. Implementing sectoral transitions with deep emission reductions is the backbone of ambitious corporate climate strategies. However, progress remains vague.

For example, automotive manufacturers demonstrate insufficient progress in increasing the share of electric vehicle sales. Apparel manufacturers lack transparency regarding the progress of electrifying manufacturing processes in their supply chains. Similarly, technology companies fail to demonstrate progress in procuring renewable electricity for third-party data centers. This lack of measurable progress raises serious doubts about whether companies are truly on track to meet their long-term climate commitments.

CCRM 2025: Corporate Sustainability Standards and Transition-Specific Targets

Fourth, current corporate accountability standards are failing to deliver satisfactory results. While initiatives like the Science-Based Targets initiative (SBTi) have successfully mobilized thousands of companies to set targets, this first-generation accountability standard is considered ineffective in guiding companies toward deep emission reductions and meaningful sectoral transitions. The CCRM’s assessments, which differ significantly from validations by other initiatives, highlight this issue.

For example, while the SBTi assesses the targets of most technology companies as aligned with a 1.5°C pathway, the CCRM analysis assesses the integrity of many of those assessments as unclear or very poor. These differences are often due to sector-specific methodological issues that existing standards do not adequately address. The ongoing major revisions to key standards such as the SBTi and the GHG Protocol are likely to provide additional evidence for the CCRM’s criticisms. They will also offer a crucial opportunity for all of us to address these shortcomings and redirect the accountability system toward more credible and effective climate action.

Fifth, specific transition-based targets offer a better solution. Given the shortcomings of existing GHG emissions targets, the CCRM proposes complementing them with transition-specific alignment targets. These are metrics that directly measure companies’ progress on key decarbonization milestones in their sectors, such as the percentage of annual battery-electric vehicle sales for automakers or the proportion of low-emission steel purchased by construction companies.

Several leading companies have already set such targets: Stellantis and GM have set electric vehicle sales targets; Google and Microsoft are pursuing 24/7 carbon-free energy; H&M Group is targeting 100% renewable electricity for all suppliers; and Danone is targeting a reduction in methane emissions from fresh milk production. These examples provide valuable blueprints that other companies can replicate to accelerate near-term climate action. Unfortunately, to date, only few companies have implemented this practice.

TPI Report 2025: Misalignment

The State of the Corporate Transition 2025 report from the TPI Global Climate Transition Centre at the London School of Economics and Political Science (LSE) provides an equally, if not more, alarming, data-driven outlook. Published on September 17, 2025, the report assessed the world’s 2,000 highest-emitting public companies. It highlights a persistent gap between long-term ambition and short-term action, as well as the questionable credibility of many corporate transition plans. Five key lessons from the report support the argument for healthy skepticism.

First, the climate targets of most companies remain unaligned with the Paris Agreement, especially in the short- and medium-term. The share of companies aligned with the 1.5°C target has more than tripled since 2020, reaching 30% of those with stated commitments. However, despite these encouraging improvements, the majority of companies still fail to meet the Paris Agreement goals. Specifically, 56% of companies are not aligned with the 1.5°C or Below 2°C targets in the long term (2050). This figure jumps to around 75% when assessed in the short term (2027–28) and medium term (2035).

These findings provide strong evidence that while setting long-term net-zero targets has become common, companies continue to postpone substantial emissions reductions into the future, with few setting ambitious intermediate targets.

TPI Report 2025: Credibility and Performance

Second, credible transition plans are rare. One of the report’s key themes is the credibility of companies’ climate commitments, assessed through the Management Quality (MQ) 5 Level framework. Level 5 specifically tests whether companies have transition plans that include defined, quantified, and financed actions to get to net zero.

The results are disappointing: nearly all of the 2,000 companies assessed show clear gaps in transition planning and implementation. Not a single company achieved all Level 5 indicators, and fewer than 10% achieved a quantifiable score. Most worryingly, fewer than 1% of companies have committed to aligning capital expenditure with their decarbonization goals—a crucial step in signaling seriousness about the transition. This suggests that long-term net-zero ambitions are rarely supported by compelling planning and funding.

Third, historical performance does not align with future ambitions. Ambition alone clearly never guarantees results. This TPI report analyzes companies’ historical emissions intensity trends (2020–2023) to test whether their current actions align with their stated ambitions.

There has been some progress, with companies across most sectors reducing their emissions intensity in line with the Below 2°C scenario. However, performance is insufficient for the more stringent 1.5°C scenario. Critical sectors like oil & gas, cement, and steel did not reduce emissions fast enough between 2020 and 2023 to meet 1.5°C requirements. The oil & gas sector, in particular, made the least progress. Furthermore, as new climate benchmarks demand steeper reductions, nearly all sectors should now accelerate their decarbonization rates beyond what they have achieved historically.

TPI Report 2025: Unproven Tech and Scaling Issues

Fourth, many decarbonization strategies rely on unproven technologies. This report conducts a new analysis of the various decarbonization levers companies rely on and assesses their commercial readiness. Fifty-six percent of companies across eight high-emission sectors rely on various carbon capture and removal technologies as part of their transition strategies.

Sectors with mature and proven options, such as automotive and electricity, are reducing their emissions intensity quite rapidly. In contrast, the report finds that many companies, particularly in sectors where emissions are difficult to reduce like aviation and cement, rely on technologies that are still in the early stages of development and face performance risks in their implementation. This reliance on immature technologies suggests that some transition plans may be unreliable, if not downright lacking in seriousness.

Fifth, while good climate governance practices are in place, they are not yet widespread. Corporate recognition of climate change is now widespread, with most companies achieving at least Level 3 of the MQ framework.

However, more strategic issues remain overlooked. Only 45% of companies incorporate climate into executive remuneration, and only 29% disclose internal carbon pricing. Even more concerning is the poor performance of climate lobbying. Only 27% of companies publicly state their support for mitigation policies, and only 10% manage the inconsistency between their climate positions and those of the business associations they are members of.

This suggests that while companies may be managing their own emissions, many are failing to align their climate ambitions with their policy advocacy. Advocacy is a crucial area given the powerful and often negative influence of corporate lobbying on climate policymaking.

Demanding Integrity in the Climate Transition

For me, the evidence from these two reports paints a bleak picture. While some leading companies are demonstrating good practices, the global business sector as a whole has not shown a seriousness commensurate with the scale of the climate crisis. Ambitious net-zero promises are often compromised by weak short-term targets, unreliable implementation plans, reliance on unproven technologies, and a failure to fundamentally change emissions-intensive business models.

This is clearly not the time for complacency. As investors, consumers, regulators, and concerned citizens, we must continue to maintain a healthy skepticism of corporate claims. We must demand transparency, not only in what companies say, but also in what they deliver. We must push companies to shift from broad GHG emissions targets to specific, measurable transition-based targets that reflect real decarbonization.

For companies, this is a defining moment. Ignoring physical climate and transition risks is not only ethically irresponsible but also financially unwise. Companies that truly embed the transition into their core business plans are the ones most likely to be resilient and competitive in a low-carbon future—the only good future there is. The sustainability of current and future generations, as well as the survival of companies themselves, depends on their commitment to a climate transition that aligns with science, not just the rhetoric demonstrated by the majority of companies to date. If companies want to survive, it is time to move from mere promises to demonstrable progress.

Translator: Kresentia Madina

Editor: Abul Muamar & Nazalea Kusuma

The original version of this article is published in Indonesian at Green Network Asia – Indonesia.