A year of reckoning for corporate climate targets
As 2026 gets underway, we leave behind a mixed year for corporate climate targets.
This time last year, academics claimed hundreds of firms with emissions goals had quietly “disappeared” them since 2020.
That trend continued through 2025, as businesses struggled to decouple their economic growth from their emissions.
Looking through the most recent sustainability reports from some of the world’s biggest listed companies, it’s clear that the bullishness of the previous few years is continuing to wane.
US chocolate maker Hershey reports a “slight regression” in its attempt to halve its Scope 1 and 2 emissions “due to expansion and growth in our business”.
Specifically, it saw its Scope 1 emissions rise in 2024 compared to its 2018 baseline, partly because it increased its use of natural gas in manufacturing.
Aircraft builder Boeing revealed it had reduced its Scope 1 and 2 emissions by just 0.2% in 2024, compared to a 2023 baseline – putting it well behind its 30% reduction pledge by the end of the decade.
In some cases, the lack of progress is starting to cost companies financially.
Switzerland’s largest power producer, Axpo Holdings, confirmed it would have to pay more to its bondholders after missing its renewable energy target by 34% in 2025.
The goal was part of a sustainability-linked bond (SLB), so missing it triggered a ‘step-up’ in the coupon payment, which observers estimate will cost the firm around €4.1m.
And Axpo certainly won’t be the only one: nearly 250 companies have SLBs with 2025 deadlines, and many are expected to announce in their next filings that they missed them, resulting in pricier debt.
Scope 3
Axpo blamed its tardy performance on external factors, including slow approval processes for renewable energy projects, and geopolitical instability.
Such frustrations are widespread – especially when it comes to reducing Scope 3 emissions, which rely almost entirely on outside forces.
McDonald’s describes its Scope 3 goals as “facing challenges”, for example, due in part to a lack of progress among its franchised restaurants.
Fellow fast food giant Yum Brand posted a 1% reduction in emissions from its meat and packaging, despite a commitment to cut them by 46% by 2030.
US water technology firm Xylem issued a blunt warning about its lack of control over indirect emissions – especially those from customers using its products.
“If the global shift to low-carbon energy does not make significant progress by 2030 and beyond, we face the risk of falling short of our Scope 3 emissions intensity reduction target,” it wrote in its last sustainability report.
Bright spots
There has been some progress, though.
Both Ford and Johnson & Johnson revealed in their most recent sustainability reports that they are more than halfway to meeting their climate targets, which are verified by the Science Based Targets initiative (SBTi).
Ford, which plans to reduce its Scope 1 and 2 emissions by 76% over the next 10 years, claimed it has already achieve a 49% reduction in absolute global operational GHG emissions since 2017.
Johnson & Johnson logged a 26% absolute reduction in its Scope 1 and 2 emissions compared with 2021 – it’s aiming to hit 44% by 2030.
Of all the reports Real Economy Progress has read over the past few months, Mastercard’s is perhaps the most optimistic.
“For several years now, we have seen signs of decoupling our corporate growth from our levels of GHG emissions,” wrote the payment business, whose climate targets are also verified by SBTi.
“In 2024, we reduced Scope 1 and 2 emissions by 48% and Scope 3 emissions by 45% from our base year,” it continued, noting: “Mastercard remains on track to achieve our 2025 interim targets.”
While that’s undoubtedly good news, it won’t be much comfort for companies in carbon intensive sectors, or those with labyrinthine global supply chains.
For them, the logic of setting ambitious, timebound targets may be beginning to fray.