Data story: Tracking corporate net-zero pledge progress by sector

Why It Matters

Of the more than 10,000 companies that have publicly committed to net-zero emissions targets, fewer than 4 percent have published transition plans that independent analysts rate as credible (Net Zero Tracker, 2025). That disconnect between announcement and action represents what the Climate Action 100+ investor coalition calls the single largest systemic risk to long-term portfolio value. When corporate pledges lack interim milestones, verified emissions data, and capital expenditure alignment, they function more as marketing than as climate strategy.

The stakes are enormous. Companies covered by net-zero pledges now account for roughly 92 percent of global GDP (UNFCCC Race to Zero, 2025). If those pledges were fulfilled on schedule, cumulative emissions through 2050 would fall by an estimated 20 gigatons of CO₂ equivalent. But the pledge-to-performance gap is widening: the NewClimate Institute's 2025 Corporate Climate Responsibility Monitor found that the headline targets of the 51 largest pledging companies would deliver, on average, only a 36 percent real reduction against base-year emissions rather than the 90-plus percent implied by "net zero" branding.

Understanding sector-level progress helps investors, policymakers, and procurement teams differentiate credible commitments from greenwashing, allocate capital to companies demonstrating real decarbonization, and design regulations that close loopholes.

Key Concepts

Net-zero pledge versus transition plan. A net-zero pledge is a public statement of intent. A transition plan details how the company will reach that target, including interim milestones (typically for 2030 and 2035), capital allocation shifts, technology deployment timelines, and governance mechanisms. The Transition Plan Taskforce (TPT), launched by the UK government and now adopted as the disclosure backbone for the ISSB's IFRS S2 standard, sets five disclosure elements: ambition, implementation strategy, engagement, metrics and targets, and governance (TPT, 2024).

Scope 1, 2, and 3 coverage. Scope 1 covers direct emissions from owned operations. Scope 2 covers purchased electricity and heat. Scope 3 includes the full value chain, from purchased goods and services to product end-of-life. For most sectors, scope 3 accounts for 70 to 95 percent of total emissions. Yet the Science Based Targets initiative (SBTi, 2025) reports that only 38 percent of validated targets include a quantified scope 3 reduction pathway.

SBTi validation tiers. SBTi distinguishes between "committed" companies (those that have signed a letter of intent) and "validated" companies (those whose targets have passed technical review). As of January 2026, SBTi listed over 9,400 committed companies but only around 5,200 with validated near-term targets and just 480 with validated net-zero targets (SBTi Dashboard, 2026).

Emissions intensity versus absolute reduction. Intensity targets express emissions per unit of revenue or output; absolute targets express total tonnes reduced. Intensity targets allow companies to grow emissions in absolute terms while claiming progress. CDP data for 2025 show that 29 percent of reporting companies rely on intensity-only targets, a practice that the ISO Net Zero Guidelines (ISO IWA 42) discourage.

What's Working and What Isn't

Progress signals. Several data points suggest that the accountability infrastructure is strengthening. The number of companies with SBTi-validated near-term targets grew 42 percent between January 2024 and January 2026, reaching 5,200 (SBTi, 2026). CDP's 2025 disclosure cycle recorded a record 27,600 corporate respondents, up from 23,000 in 2023 (CDP, 2025). Mandatory disclosure regimes are expanding: the EU's Corporate Sustainability Reporting Directive (CSRD) now covers approximately 50,000 companies, and California's Climate Corporate Data Accountability Act (SB 253) requires scope 1, 2, and 3 reporting from companies with more than $1 billion in revenue starting in 2026.

In the power sector, absolute scope 1 and 2 emissions among the 50 largest listed utilities fell 18 percent between 2019 and 2024, driven by coal retirements and renewable buildout (Ember, 2025). The tech sector shows similar momentum: Microsoft, Google, and Apple have each reduced market-based scope 2 emissions by more than 50 percent relative to 2019 baselines through large-scale renewable power purchase agreements.

Persistent gaps. Heavy industry tells a different story. The steel sector's average absolute emissions declined by only 3 percent over the same period, with most reduction attributable to demand softness rather than technology deployment (World Steel Association, 2025). In oil and gas, the NewClimate Institute (2025) found that the six supermajors collectively increased production-linked scope 3 emissions by 7 percent between 2020 and 2024 despite net-zero pledges.

Aviation illustrates the mismatch between intensity and absolute metrics. Airlines reduced emissions intensity per revenue-tonne-kilometer by 12 percent from 2019 levels, but traffic growth meant absolute emissions in 2025 surpassed pre-pandemic levels by 4 percent (IATA, 2025).

Financial institutions face a unique challenge: financed emissions, categorized under scope 3, dwarf operational footprints. The Glasgow Financial Alliance for Net Zero (GFANZ) reported in 2025 that only 23 of its 130 banking members had published sector-level 2030 interim targets for high-emitting portfolios.

Key Players

Established Leaders

• Science Based Targets initiative (SBTi) — The primary global standard-setter for corporate climate targets, with validated targets covering companies representing over 40 percent of global market capitalization.
• CDP — Operates the world's largest environmental disclosure system; 27,600 companies reported through the platform in 2025.
• Climate Action 100+ — Investor-led engagement initiative with 700+ signatories managing over $68 trillion in assets, targeting the 170 highest-emitting companies.
• Transition Plan Taskforce (TPT) — UK-founded body whose disclosure framework has been integrated into ISSB standards.

Emerging Startups

• Net Zero Tracker — Open-data platform that monitors the quality and coverage of net-zero targets for countries, subnational entities, and companies.
• Watershed — Enterprise climate software platform helping companies measure, report, and act on emissions; raised $100 million Series C in 2024.
• Persefoni — AI-powered carbon accounting platform used by 250+ enterprises and financial institutions for CSRD and SEC readiness.

Key Investors/Funders

• Bezos Earth Fund — Committed $500 million to climate accountability and data transparency initiatives through 2030.
• Bloomberg Philanthropies — Funds the Task Force on Climate-related Financial Disclosures (TCFD) successor work and CDP expansion.
• European Climate Foundation — Supports policy advocacy for mandatory transition planning in the EU and UK.

Examples

Ørsted's verified decarbonization. The Danish energy company Ørsted provides one of the clearest examples of pledge-to-performance alignment. After committing in 2017 to phase out coal entirely, Ørsted retired its last coal-fired unit in 2023 and reported a 98 percent reduction in scope 1 and 2 emissions intensity by 2025 relative to 2006 (Ørsted Annual Report, 2025). Its SBTi-validated 1.5°C target includes absolute scope 3 reductions, and the company publishes an annual climate action progress report with third-party assurance.

ArcelorMittal's technology bet. The world's second-largest steelmaker pledged net-zero by 2050 and set a 25 percent carbon intensity reduction target for 2030. To date, ArcelorMittal has committed over $10 billion to hydrogen-based direct reduced iron (DRI) plants in Spain, Canada, and Belgium. Its Sestao plant in Spain became the world's first full-scale zero-carbon-emissions steel plant in 2025, producing 1.6 million tonnes per year. However, group-wide absolute emissions fell only 6 percent from the 2018 base year through 2024 because legacy blast furnaces continued operating across its global fleet (ArcelorMittal Climate Action Report, 2025).

Unilever's scope 3 challenge. Unilever set a 2039 net-zero target covering full value-chain emissions. Its 2025 sustainability report disclosed that scope 3 emissions, which comprise 98 percent of its footprint, declined by only 5 percent since 2021. The company attributed slow progress to the difficulty of decarbonizing smallholder agriculture supply chains across 130 countries. Unilever responded by launching a $1 billion Climate and Nature Fund and requiring its top 300 suppliers to set SBTi-validated targets by 2027, though the NewClimate Institute rated the overall plan as having "moderate" integrity.

Maersk's fleet transition. Shipping giant Maersk ordered 25 methanol-capable container vessels between 2021 and 2025, representing a $15 billion investment in its net-zero-by-2040 pathway. The first six vessels entered service in 2025, cutting well-to-wake emissions by 60 to 65 percent compared to conventional heavy fuel oil. Yet Maersk acknowledged that green methanol supply constraints mean the vessels will run on conventional fuel for approximately 40 percent of voyages in the near term (Maersk Sustainability Report, 2025).

Action Checklist

• Audit pledge quality. Use the Net Zero Tracker and SBTi databases to verify whether targets are validated, include interim milestones, and cover scope 3 emissions.
• Demand transition plans. Require portfolio companies or suppliers to publish TPT-aligned transition plans with capital expenditure forecasts, technology deployment timelines, and governance structures.
• Track absolute emissions. Prioritize absolute emission reductions over intensity improvements; request scope 1, 2, and 3 data through CDP or equivalent platforms.
• Benchmark by sector. Compare company performance against sector-specific benchmarks such as the Transition Pathway Initiative (TPI) carbon performance scores and the Climate Action 100+ Net Zero Company Benchmark.
• Integrate into procurement. Embed net-zero progress metrics into supplier scorecards and contract renewals; set minimum thresholds for SBTi validation status.
• Engage policymakers. Support mandatory transition plan disclosure in your jurisdiction; advocate for standardized, auditable reporting using ISSB or CSRD frameworks.
• Reassess annually. Climate targets without annual progress reviews become stale; update risk assessments and engagement strategies each reporting cycle.

FAQ

How can I tell if a corporate net-zero pledge is credible? Look for five indicators: an SBTi-validated target with a 1.5°C pathway, published interim milestones for 2030 and 2035, scope 3 coverage, a transition plan aligned with the TPT framework, and third-party assurance of reported emissions data. Companies that lack these elements are making aspirational statements rather than actionable commitments.

Which sectors are making the most progress? The power and technology sectors lead on absolute emissions reductions, driven by renewable energy deployment and efficiency gains. Heavy industry (steel, cement, chemicals) and fossil fuel extraction lag significantly, with most companies relying on intensity targets or offsets rather than structural decarbonization. Financial services have improved disclosure rates but struggle to set credible financed-emissions targets.

Why do scope 3 emissions matter so much? For consumer goods, finance, and technology companies, scope 3 typically represents 80 to 95 percent of total emissions. A company can eliminate scope 1 and 2 entirely and still have a minimal impact on its real climate footprint if scope 3 is ignored. Regulators increasingly require scope 3 disclosure, and frameworks like the CSRD mandate it for large companies starting in 2026.

What role do carbon offsets play in corporate net-zero targets? Offsets should only be used for genuinely residual emissions after a company has maximized direct reductions. The SBTi's Corporate Net-Zero Standard limits offsets to neutralizing residual emissions (typically 5 to 10 percent of the baseline) and requires that offsets represent permanent carbon removal rather than avoidance credits. Over-reliance on offsets is a key indicator that a pledge lacks integrity.

How will mandatory disclosure change corporate behavior? Early evidence from the EU's Non-Financial Reporting Directive (the predecessor to CSRD) suggests that mandatory disclosure increases data quality and comparability, raises board-level attention, and correlates with a 5 to 8 percentage point improvement in target-setting rates within three years of implementation (European Commission, 2025). The expansion to CSRD, SEC rules, and California SB 253 is expected to accelerate this effect across a much larger pool of companies.

Sources

• Net Zero Tracker. (2025). Net Zero Stocktake 2025: Assessing the Status and Trends of Net Zero Target Setting. University of Oxford, Energy and Climate Intelligence Unit.
• NewClimate Institute. (2025). Corporate Climate Responsibility Monitor 2025. NewClimate Institute and Carbon Market Watch.
• Science Based Targets initiative. (2026). SBTi Dashboard: Companies Taking Action. SBTi.
• CDP. (2025). CDP Global Disclosure Report 2025: Corporate Environmental Transparency Trends. CDP Worldwide.
• Ember. (2025). Global Electricity Review 2025: Power Sector Emissions Trends. Ember Climate.
• World Steel Association. (2025). Steel Statistical Yearbook 2025: Emissions Intensity Benchmarks. World Steel Association.
• IATA. (2025). Aviation Industry Carbon Emissions Report 2025. International Air Transport Association.
• Transition Plan Taskforce. (2024). TPT Disclosure Framework: Final Recommendations. UK Government.
• European Commission. (2025). Impact Assessment of Non-Financial Reporting Requirements on Corporate Climate Action. European Commission DG FISMA.
• UNFCCC Race to Zero. (2025). Race to Zero Progress Report: Campaign Metrics and Minimum Criteria. United Nations Framework Convention on Climate Change.