Sustainability Atlas
Policy, Standards & Strategy·13 min read··...

Data story: the metrics that actually predict success in Net-zero strategy & transition planning

The 5–8 KPIs that matter, benchmark ranges, and what the data suggests next. Focus on data quality, standards alignment, and how to avoid measurement theater.

In 2024, only 35% of businesses were on track to meet their net-zero commitments, according to CDP data, despite over 10,000 companies now having committed to science-based targets through the SBTi. The gap between ambition and execution has never been wider—or more consequential. As the EU's Corporate Sustainability Reporting Directive (CSRD) mandates 1.5°C-aligned transition plans and the Science Based Targets initiative delisted 239 major companies for failing to meet validation deadlines, the question is no longer whether organizations need transition plans, but whether their chosen metrics will actually predict success or perpetuate what researchers call "measurement theater."

This data story examines the 5–8 KPIs that genuinely correlate with decarbonization progress, offers sector-specific benchmarks from the latest 2024-2025 research, and distinguishes leading indicators from vanity metrics that obscure more than they reveal.

Why It Matters

The stakes for net-zero transition planning have escalated dramatically. Global CO₂ emissions from fossil fuels reached 38.6 GtCO₂ in 2024, a 1.3% increase from 2023 (Carbon Majors, 2024). Meanwhile, the IPCC requires a 43% reduction in global emissions by 2030 for 1.5°C alignment—a target that demands unprecedented corporate transformation.

Regulatory pressure is intensifying across jurisdictions. The EU's ESRS E1 standard under CSRD now mandates science-based, time-bound GHG reduction targets for 2030 and in five-year steps to 2050, covering Scope 1, 2, and 3 emissions. The December 2025 Omnibus I amendments refined the scope to companies with over 1,000 employees and €450 million in net turnover, but the substantive requirements for credible transition plans remain intact. Companies must disclose decarbonization levers, financial resource allocation, board-level governance, and annual progress tracking.

For procurement professionals in the Asia-Pacific region, this regulatory cascade has direct supply chain implications. The Corporate Climate Responsibility Monitor 2024 found that most major companies' Scope 3 targets "lack substantiation" and often rely on "creative accounting" through offsets and renewable energy certificates. As supplier engagement becomes a procurement priority, distinguishing genuine progress from performative disclosure determines both regulatory compliance and supply chain resilience.

Key Concepts

What Makes a Transition Plan "Credible"

The Transition Pathway Initiative (TPI) and Climate Action 100+ have converged on a definition of credible transition plans that encompasses three dimensions: ambition alignment with 1.5°C pathways, operational integration with business strategy and capital allocation, and accountability mechanisms tied to governance and executive compensation.

A comparative analysis of 14 global frameworks published in the Journal of Environmental Management (2025) identified 13 key components and 38 sub-components that constitute comprehensive transition planning. Strong convergence emerged around business planning, financial alignment, and governance structures, while policy engagement and just transition indicators showed the greatest variability across frameworks.

The Hierarchy of Climate Metrics

Not all climate metrics carry equal predictive weight. Research from the Exponential Roadmap Initiative categorizes transition plan KPIs into four "net-zero conditions":

  1. Renewables integration: 100% of analyzed plans include KPIs (focus on energy rather than materials)
  2. Circularity targets: Only 40% include KPIs (mainly plastic packaging)
  3. Optimized systems: 33% include clear metrics
  4. Regenerative practices: 33% include clear metrics

This distribution reveals a systemic bias toward energy-related metrics while neglecting circular economy and nature-based elements that are increasingly material to Scope 3 emissions.

Leading vs. Lagging Indicators

Lagging indicators—such as annual Scope 1 and 2 emissions totals—tell you where you've been. Leading indicators predict where you're going. Effective transition plans emphasize:

  • Capital allocation ratios: Proportion of CapEx directed toward decarbonization versus business-as-usual
  • Supplier engagement rates: Percentage of Scope 3 suppliers with validated science-based targets
  • Technology adoption timelines: Committed dates for fleet electrification, process heat decarbonization, or renewable energy procurement
  • Governance integration: Frequency of board climate reviews and linkage to executive remuneration

Sector-Specific KPI Benchmarks

The following table synthesizes benchmark ranges from CDP, SBTi, and the Corporate Climate Responsibility Monitor for key sectors relevant to Asia-Pacific procurement:

SectorPrimary KPITarget Range (2030)Top Decile Performance
ManufacturingScope 1+2 Intensity (tCO₂e/revenue)30-50% reduction vs. baseline>55% reduction
LogisticsFleet electrification (%)40-60% ZEV share>75% ZEV share
Real EstateBuilding energy intensity (kWh/m²)<80 kWh/m²<50 kWh/m²
Consumer GoodsScope 3 supplier engagement (%)60-70% by spend>85% by spend
Financial ServicesFinanced emissions intensity25-40% reduction>50% reduction
TechnologyRenewable electricity (%)80-100%100% + 24/7 matching

Note: These benchmarks represent ranges from validated SBTi targets and should be calibrated to sector-specific decarbonization pathways.

What's Working

Science-Based Target Adoption at Scale

The SBTi reached a milestone of 10,000+ companies with commitments as of January 2026, with 7,135 having fully validated targets. The initiative recorded over 2,800 validations in 2024 alone—a 30% increase in target submissions compared to 2023. This momentum demonstrates that standardized target-setting frameworks can achieve rapid adoption when regulatory and investor pressure align.

Companies with validated science-based targets report tangible business benefits. An SBTi survey of 171 companies in 2025 found that 91% reported positive overall business impact, citing stronger market positioning, investor confidence, and strategic cohesion as primary benefits.

Integrated Financial Planning

Organizations embedding sustainability KPIs into annual budgeting cycles show measurably stronger execution. DHL, for example, aligns sustainability KPIs with annual budgeting timelines, embeds ESG metrics in divisional plans with associated operational and capital expenditure, and conducts monthly forecasting of sustainability KPIs alongside financial data. This integration moves climate strategy from a parallel workstream to core business management.

HSBC's Net Zero Transition Plan 2025 exemplifies financial sector leadership, with $54.1 billion mobilized in sustainable finance in H1 2025 (a 19% year-over-year increase) and cumulative sustainable finance of $447.7 billion from 2020 through mid-2025. The plan includes sector-specific decarbonization targets and a thermal coal phase-out timeline, demonstrating how granular capital allocation metrics translate strategy into measurable progress.

Board-Level Accountability

Companies with monthly board-level sustainability reporting and executive compensation tied to climate targets consistently outperform peers on emissions reduction trajectories. Climate Action 100+ benchmark data shows that 77% of focus companies have established internal accountability mechanisms, though the quality of these mechanisms varies significantly.

What's Not Working

Scope 3 Measurement Gaps

Despite Scope 3 emissions typically representing 70-90% of a company's carbon footprint, the Corporate Climate Responsibility Monitor 2024 found that most companies' Scope 3 targets lack substantiation. Common failures include reliance on supplier questionnaires with unverified data, use of industry-average emission factors instead of primary data, exclusion of material Scope 3 categories, and targets set without supplier capacity assessment.

Offset Dependency

An analysis of 51 major companies by the NewClimate Institute found that many net-zero commitments rely heavily on carbon offsets and renewable energy certificates rather than absolute emissions reductions. The median corporate commitment for 2030 is approximately 30% absolute reduction of full value chain emissions—well short of the 43% required for 1.5°C alignment.

Just Transition Blind Spots

Only 39% of analyzed companies satisfy at least one just transition indicator, according to the Climate Action 100+ benchmark. Workforce transition planning, community engagement, and equitable distribution of decarbonization costs remain systematically underweighted in transition plans, creating execution risks as industrial transformation accelerates.

Delistings and Credibility Erosion

The SBTi delisted 239 major companies in 2024 for missing the 24-month target validation deadline, including Microsoft, Walmart, Unilever, and Marks & Spencer. While approximately 60% retained near-term targets despite removal, these delistings signal that even well-resourced organizations struggle with Scope 3 complexity and evolving standards.

Key Players

Established Leaders

CDP (Carbon Disclosure Project): The global disclosure system processes climate data from over 23,000 companies, providing the most comprehensive dataset for benchmarking transition plan metrics and tracking year-over-year progress.

Science Based Targets initiative (SBTi): With over 7,135 companies holding validated targets, SBTi has become the de facto standard for credible corporate climate commitments. The September 2025 Corporate Near-Term Criteria v5.3 and Corporate Net-Zero Standard v1.3 define current best practice.

Transition Pathway Initiative (TPI): Housed at the London School of Economics, TPI provides sector-specific carbon performance benchmarks used by investors managing over $50 trillion in assets.

Climate Action 100+: This investor coalition coordinates engagement with the world's largest corporate emitters, with 90 new signatory investors joining between June 2023 and 2024.

Emerging Startups

Persefoni: An AI-powered carbon accounting platform that automates Scope 1, 2, and 3 emissions measurement and scenario modeling for transition planning.

Watershed: Provides enterprise carbon management software with supply chain emissions tracking and decarbonization pathway simulation.

Normative: Swedish-founded platform specializing in automated carbon accounting and CSRD-compliant sustainability reporting.

Plan A: Berlin-based company offering decarbonization and ESG management software with integrated target-setting aligned to SBTi methodologies.

Key Investors & Funders

Breakthrough Energy Ventures: Bill Gates-founded fund deploying over $2 billion across climate technology investments, with particular focus on hard-to-abate sectors.

Generation Investment Management: Al Gore and David Blood's sustainable investment firm with over $45 billion in assets under management, actively engaging on transition plan quality.

Climate Policy Initiative (CPI): Provides analytical resources tracking global climate finance flows and financial institution transition progress.

European Investment Bank: The EU's climate bank with a target to support €1 trillion in climate and environmental investments by 2030.

Examples

  1. Maersk: The shipping giant's Climate Transition Plan commits $513 million in 2024 CapEx toward decarbonization, with $1.1-1.2 billion planned by 2030. Maersk has ordered methanol-powered vessels and established green corridor partnerships, demonstrating how capital allocation metrics translate into operational transformation. Their APM Terminals subsidiary achieved 45% renewable electricity in 2024.

  2. Nestlé: Nestlé's Net Zero Roadmap integrates regenerative agriculture investments across their agricultural supply chain with annual milestone reporting. The company has committed to reducing Scope 3 emissions from purchased goods and services—their largest emissions category—through supplier engagement covering over 60% of procurement spend.

  3. Tata Steel Europe: Facing the challenge of decarbonizing steel production, Tata Steel has committed to hydrogen-based direct reduced iron technology with a 2030 pilot timeline. Their transition plan includes social dialogue with unions on workforce implications, addressing just transition requirements increasingly expected by regulators and investors.

Action Checklist

  • Establish baseline emissions inventory: Complete Scope 1, 2, and 3 GHG inventory using GHG Protocol standards, with primary data collection for material Scope 3 categories
  • Validate targets through SBTi: Submit near-term targets for external validation within 24 months of commitment, and consider simultaneous net-zero target submission
  • Integrate climate KPIs into financial planning: Embed decarbonization milestones in annual budgeting cycles with associated CapEx and OpEx allocations
  • Deploy supplier engagement program: Prioritize supplier engagement by emissions contribution, with procurement incentives tied to validated targets
  • Establish governance mechanisms: Implement quarterly board-level climate reviews and link executive compensation to emissions reduction trajectories
  • Develop scenario analysis capabilities: Model strategy resilience under 1.5°C, 2°C, and current policies scenarios, updating annually
  • Report progress transparently: Publish annual transition plan updates aligned with ESRS E1 / ISSB S2 requirements, including locked-in emissions disclosure

FAQ

Q: What distinguishes a credible transition plan from greenwashing? A: Credible transition plans demonstrate three elements: alignment with 1.5°C pathways through science-based targets validated by an independent body (such as SBTi), operational integration evidenced by capital allocation toward decarbonization rather than offsets, and accountability mechanisms including board oversight and executive compensation linkage. The EU's ESRS E1 standard provides a regulatory definition requiring time-bound targets, decarbonization levers, financial planning, governance structures, and annual progress updates. Plans that rely primarily on future technologies, offsets, or vague commitments lack the specificity and accountability that distinguish genuine transition strategies.

Q: How should organizations prioritize Scope 3 emissions measurement given data challenges? A: Begin with materiality assessment to identify the Scope 3 categories representing the largest emissions contribution—typically purchased goods and services, use of sold products, or upstream transportation. For these material categories, establish primary data collection programs starting with highest-spend suppliers. Use industry-average emission factors only as placeholders while scaling supplier engagement. The SBTi requires that targets cover at least 67% of Scope 3 emissions, so focus resources on categories that cross this threshold. Automated platforms like Persefoni and Watershed can accelerate data collection while maintaining audit trails for verification.

Q: What are the implications of the 2025 Omnibus I amendments for companies previously preparing for CSRD compliance? A: The December 2025 Omnibus I amendments raised the CSRD applicability threshold to companies with over 1,000 employees AND €450 million net turnover, removing the previous two-out-of-three test. Companies falling below these thresholds may receive transition relief exemptions for FY2025-2026, with revised scope requirements beginning for FY2027 (reports in 2028). However, organizations that have already invested in transition planning infrastructure should maintain these capabilities—regulatory direction of travel remains clear, investor expectations continue regardless of regulatory mandates, and supply chain pressure from in-scope customers will require comparable disclosure from suppliers.

Q: How do leading companies track progress against transition plan milestones? A: Leading organizations implement integrated performance management systems that track climate KPIs with the same rigor as financial metrics. This includes monthly forecasting of sustainability KPIs, quarterly variance analysis against transition plan milestones, and annual recalibration based on technology cost curves and regulatory developments. Governance best practice involves monthly or quarterly board-level sustainability reporting alongside financial performance, with clear escalation protocols when emissions trajectories deviate from targets.

Q: What role do carbon offsets play in credible transition plans? A: Current best practice positions offsets as a complement to—not substitute for—direct emissions reductions. The SBTi's Net-Zero Standard requires that companies reduce emissions by at least 90% before using offsets to neutralize residual emissions. The Corporate Climate Responsibility Monitor found that many corporate net-zero claims rely excessively on offsets, undermining credibility. Organizations should prioritize the mitigation hierarchy: avoid emissions first, reduce what cannot be avoided, substitute high-carbon inputs with low-carbon alternatives, and only then consider high-quality removals for truly unavoidable residual emissions.

Sources

Topics

netzerounit economicsCSRDtransition plantraceabilitycertification

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