By: Maria Grazia Cafagna, Director, ESG & Regulatory Solutions, CCH Tagetik, Wolters Kluwer
If your organization has missed its climate targets, you’re not alone. A 2025 Nature Climate Change study found that almost 40% of companies missed their 2020 targets, or have stopped reporting entirely.
However, missed targets and paused reporting aren’t all that surprising, especially given the significant challenges, roadblocks and detours that many companies have faced when working toward their initial decarbonization goals.
For example, in the U.S., a growing wave of anti-ESG legislation in states including Texas and Florida has prompted some companies to fear backlash for prioritizing environmental goals. Meanwhile, even more progressive geographic regions, like California and the EU, are retooling their requirements to narrow and streamline reporting obligations.
Beyond regulatory uncertainty, many organizations have struggled with the complexity of Scope 3 emissions, slower-than-expected technological progress, and economic pressures that have frequently outweighed transition risks. These issues are compounded by persistent macroeconomic instability, geopolitical tensions, rising costs, and shifting investor priorities.
But slower-than-expected or paused progress doesn’t mean failure. Rather, companies of all sizes should meet this moment as an opportunity to recalibrate their sustainability strategies, as they set the next generation of climate goals. Here are a few suggestions for getting started.
1. Recalibrate why you set and report on targets – leading with business value
While climate change regulations (and enforcement) may fluctuate by region and political regime, the reality is that regulatory compliance should never have been the singular, or even primary, driving force for setting decarbonization targets.
Regardless of regulatory uncertainty, environmental and climate issues will continue to cause disruption and introduce risk into the way every business operates. That’s why the most enduring and successful sustainability initiatives have always been, and will continue to be, those that aim to improve both environmental outcomes and business performance.
Version 2.0 climate targets must clearly articulate the connections between your organization’s climate progress and its ability to move the needle on other strategic priorities…like improving operational efficiency, identifying new markets, better mitigating risk or effectively weathering supply chain disruptions.
To ensure climate targets are not just created, but also met, they must be more than environmental commitments. They must be strategic tools that drive broader organizational priorities and unlock long-term value.
2. Define specific, financially grounded targets
It was only a few years ago that companies were loudly and proudly announcing lofty net-zero commitments, all too often driven by a desire to respond to public sentiment or investor pressure. Unfortunately, many organizations didn’t fully understand the operational changes or financial investments required to implement those lofty goals.
That’s why the next generation of climate targets should gravitate away from ambiguous “net zero by 2050” goals and instead focus on setting goals that are financially grounded, realistic, and always aligned with the broader business strategy.
For example: your organization may set a target to improve energy efficiency by shifting to renewables, while also reducing costs and exposure to energy price volatility. Or you may collaborate with R&D teams to identify ways to make specific products more sustainable, while also unlocking new market opportunities and revenue streams. Or partner with supply chain teams to optimizing specific logistic processes, in an effort to reduce both carbon and cost. When sustainability targets are directly tied to core business objectives, they not only become more achievable…they can become essential to driving the broader organization’s success.
3. Ensure you have the right capabilities in place to meet each target
Don’t just set the targets – ensure you’ve got the capabilities and resources in place to reach each one.
Do you have the right data infrastructure and technologies in place to forecast and model multiple scenarios and track each goal’s progress? Does your team have expertise or talent gaps that need to be filled? What teams, systems and processes must be integrated? Do you have the right cross-functional governance and accountability teams and processes in place?
If the first generation of climate targets taught us anything, it’s that if you don’t clearly define the capabilities required to meet each target, they’ll remain paper-based ambitions.
4. Meaningfully involve the Office of the CFO
Chances are, when most organizations developed their initial climate targets, the CFO likely had minimal involvement. Years later, experts ranging from PwC to KPMG have emphasized the same point: meaningfully involving CFOs in setting sustainability targets has emerged as a clear best practice.
When setting next generation climate goals, the CFO should be as just engaged as the CSO when it comes to assessing sustainability investments; implementing realistic ROI timelines; analyzing and prioritizing regulatory, reputational, and transition risks; embedding sustainability into company strategy and financial goals; and ensuring executive-level oversight of sustainability reporting, governance, and disclosure compliance.
Climate transition planning is, at its core, financially driven. And as climate change increasingly becomes a mainstream business risk, CFO involvement should only intensify.
Since companies set their first climate targets, much has changed. Regulations have evolved, economic pressures have intensified, and the realities of implementation have come into sharper focus. But missed climate goals aren’t a failure, they’re a signal to recalibrate. The next generation of climate commitments must be appropriately resourced, and grounded in feasibility, clarity and financial rigor. Success will belong to the organizations that move beyond ambition to action.
