Companies around the world are accelerating their climate commitments at a record pace. The Science Based Targets initiative (SBTi) reports that corporates and other companies with both near-term and long-term net-zero targets jumped 227% in just 18 months.
Firms setting near-term only goals also grew by almost 97% in the same period. This fast growth shows a big change in how companies see climate responsibility. This is especially true for high-emission sectors like Industrials, Consumer Discretionary, and Materials.
The data shows that climate ambition is no longer a niche initiative. Companies are adding climate targets to their main business strategies. This change affects investors, supply chains, and whole industries.
Why Are Companies Choosing Science-Based Targets?
Science-based targets allow businesses to align with the Paris Agreement’s 1.5°C pathway, ensuring that emissions cuts follow the latest climate science. These targets give companies a credible plan to reduce emissions while addressing long-term risks.
The SBTi estimates that following science-based pathways could save $1.5 trillion in climate costs by 2030. The financial case is clear: strong climate plans save money. These goals help reduce risk, improve efficiency, and help companies adapt to a low-carbon economy.
Investor and customer expectations also play a critical role. Companies with validated targets are increasingly viewed as more reliable by the market.
In fact, businesses with SBTi-validated goals represented 39% of global market capitalization in 2023, and this share rose to 41% by 2024. These firms also outperformed the broader economy, growing market value by 16% compared to 11% for global GDP.
This net-zero or climate commitment alignment boosts corporate reputation. Brands with real emission-reduction goals stand out. Consumers and investors want proof of progress, so this gives companies an edge.
David Kennedy, SBTi’s Chief Executive Officer, stated:
“Building climate action into commercial strategy helps maintain competitiveness now and in the future and allows companies to capitalise on opportunities in the low-carbon economy.”
The report further reveals that more companies are now setting net-zero targets, showing a clear rise in ambition. In 2023, only 17% of corporates with validated science-based targets had committed to net-zero. By the end of 2024, that share had nearly doubled to 33%.
The trend continued into 2025. By mid-year, over 1,400 companies had announced net-zero targets, making up 38% of all corporates with science-based targets.
The 2027 Update: Raising the Bar
The SBTi will introduce updated standards in 2027 that will set tougher rules for how companies design and report their targets. The revisions aim to prevent greenwashing and ensure climate action stays in line with evolving science.
The changes will affect three main areas:
- Data quality: Companies must provide more robust proof of how they measure and report emissions.
- Scope of targets: Almost all targets already include Scope 3 emissions, which often account for over 70% of a company’s carbon footprint. The 2027 standards will ensure this remains mandatory and more consistent.
- Target reviews: Firms will be required to revisit and update their goals every five years, ensuring they remain scientifically valid.
The new framework will also require companies to publicly show whether their targets are active, updated, or withdrawn. This transparency will create stronger accountability and make it easier to compare progress across industries.
Asia’s Green Acceleration: China Takes the Lead
One of the most striking findings from the SBTi’s latest report is the surge of climate commitments in Asia. The region saw a 134% increase in the number of companies with validated targets, outpacing global averages.
China is leading this momentum. In just 18 months, the number of Chinese companies with science-based targets grew from 137 to 450, marking a 228% increase. Much of this growth comes from industries central to the global supply chain, such as manufacturing, construction, and raw materials.
Other Asian economies are also moving quickly. Government pressure, export requirements, and investor expectations are driving firms to adopt science-based goals.
Big companies are urging their suppliers to do the same. This creates a ripple effect in local and global supply chains.
This trend suggests that Asia will play a central role in shaping the global low-carbon transition. As one of the world’s largest manufacturing hubs, actions taken here have a direct influence on global emissions.
Scope 3 in Focus: Tackling the Hardest Emissions
The growth in science-based targets is already making a measurable difference. Companies with validated targets must report and act on Scope 1, 2, and 3 emissions. These emissions include direct fuel use, as well as activities from suppliers and customers.
Since Scope 3 emissions are typically 11 times greater than direct emissions, this comprehensive approach drives meaningful reductions across value chains.
Currently, 96% of validated companies include Scope 3 in their plans. This ensures emissions are reduced not only at company headquarters but also across the entire production and distribution network.
As standards tighten, companies will have to further strengthen reporting, focus on harder-to-cut emissions, and increase transparency. These improvements will accelerate global decarbonization while also improving operational efficiency. Better emissions data helps businesses reduce waste, save energy, and boost long-term resilience.
Wall Street Meets Climate Action: Investor Shifts
The rise in corporate climate and net-zero ambition is also reshaping financial markets. Companies with clear, science-based climate targets are seen as less risky. This makes them more appealing to investors who care about Environmental, Social, and Governance (ESG) factors.
This trend is also fueling demand in the carbon markets. As companies work to cut emissions, many still face unavoidable Scope 3 emissions. To manage these, they increasingly turn to high-quality carbon credits.
The World Bank says the voluntary carbon market might reach $50 billion by 2030. This growth will partly come from companies following SBTi standards.
Regions moving quickly—such as China and other Asian countries—are likely to see economic benefits, including more jobs in green technology and clean energy industries.
On the other hand, slow-moving regions or sectors may lose competitiveness. Global buyers and investors prefer partners that align with climate goals.
Looking Ahead: The Path to Net Zero
The 227% rise in near-term and net-zero target adoption shows that companies are no longer delaying climate action. Key sectors such as industrials and materials, responsible for a large share of global emissions, are now leading the transition.
As the 2027 update approaches, expectations will rise even higher. Companies must keep data clear, track all value-chain emissions, and update their goals often. Those that succeed will not only contribute to global climate goals but also position themselves as leaders in the low-carbon economy.
The path forward is clear: corporations that act decisively today will shape business strategies, capital flows, and supply chains in the years ahead. In doing so, these corporates are not just helping reduce emissions — they are building the foundation for a sustainable, net-zero global economy.
The post Corporate Climate Pledges Surge 227% as SBTi Net Zero Standards Tighten appeared first on Carbon Credits.
Most businesses that decide to act on their net-zero targets reach the same point of friction. Buying carbon credits has meant tracking down brokers, sitting through sales calls, and requesting a quote just to learn a price, sometimes with limited proof of what you are buying.
The earnings calls that quietly reframed climate from sustainability question to operating risk.
Three earnings calls in the last 18 months tell the story without any help from a press release.
Hershey, May 2024: cocoa price exposure compresses margin, and the company attributes part of the cost shock to West African weather. Olam, July 2024: coffee climate exposure quantified in the annual report. JBS, January 2025: supply chain climate disclosures expanded materially in response to investor pressure and regulatory expectation. None of these companies issued the announcement as climate news. They issued it as financial news. The climate-linked supply chain risk did not arrive with a sustainability framing; it arrived as a P&L line.
You are probably reading this article because you suspect the same thing is happening to your business. This piece walks through what is showing up on which earnings calls, how procurement and finance leaders are quantifying the exposure, and what serious corporates are doing about it before the regulator asks.
Where climate risk has already appeared in earnings
The pattern is consistent across resource-intensive sectors. A weather event compresses supply, the price spikes, the cost flows through the income statement, and the analyst on the call asks whether the event is anomalous or structural. Increasingly, the honest answer is the second one.
Cocoa is the cleanest example. The 2023 to 2024 West African harvest fell sharply on the back of erratic rainfall and disease. Cocoa futures more than tripled. Companies with concentrated West African sourcing absorbed the cost; companies with diversified sourcing absorbed less. The exposure was not climate as ESG topic. It was climate as cost of goods.
Coffee follows the same pattern. Brazilian and Vietnamese harvests have moved on weather more sharply across the last several seasons. Roasters with long-tenor supplier relationships and origin diversification have managed the volatility; roasters with spot-market exposure have not. Wheat, sugar, palm oil, beef: the same dynamic in different commodities, a pattern the IPCC AR6 Working Group II report projects will intensify across agricultural systems through mid-century.
What this means: climate risk is no longer a footnote in the 10-K. It is a line item the CFO has to explain on the call.
The three commodity exposures that hit margin first
For most companies with material Scope 3 exposure, three exposures dominate the near-term P&L risk.
- Concentrated single-origin sourcing in a climate-vulnerable region. If your tier-one supply for any material commodity sits in one geography, you have a concentration risk that climate amplifies. Diversification across origins is the obvious hedge, but it takes years to build and requires relationships you cannot acquire by tender.
- Supplier financial fragility under climate stress. Smallholder farmers, who supply a large share of the global cocoa, coffee, and palm oil market, do not carry the balance sheets to absorb yield shocks. When yields collapse, they exit. When they exit, your supply base shrinks, and the surviving suppliers raise prices. The risk is structural, not cyclical.
- Logistics and storage exposure to extreme weather. Hurricane disruptions to Gulf shipping, drought-driven Panama Canal restrictions, flooding in European inland waterways: each of these has moved input costs in the last three years, a pattern documented in Munich Re’s natural catastrophe data. The exposure shows up as a one-quarter event in the financial press but accumulates over time on the cost line.
TCFD and ISSB disclosure changes
The disclosure architecture has now caught up with the risk. The Task Force on Climate-related Financial Disclosures, whose recommendations are now embedded in the ISSB’s IFRS S2 climate standard, requires companies to disclose climate-related risks across physical and transition categories, with quantification where possible.
For physical risk specifically (the climate-linked supply chain risk you are reading about), the disclosure must address both acute exposures (extreme weather events) and chronic exposures (gradual changes in temperature, precipitation, and growing seasons). The disclosure must address the time horizon over which the risk is material, the parts of the value chain exposed, and the financial impact under different scenarios.
The CSRD imposes similar requirements under European law, with double materiality (both financial and impact materiality) embedded in the assessment. The practical effect: your auditors and your investor relations team now need a defensible answer to the climate-linked supply chain risk question, and the answer needs to be quantified.
What procurement and finance can do now
Three actions matter near-term.
Map your exposure. Most companies do not have a clear view of which tier-one and tier-two suppliers sit in which climate-vulnerable geographies. Without the map, you cannot quantify the risk, and without the quantification, you cannot disclose it credibly. The map is the foundation, and World Resources Institute climate risk research provides useful public tooling to start.
Diversify and deepen, in that order. Diversification across origins reduces concentration risk, but the deeper move is to invest in the resilience of the suppliers you already have. Regenerative practices, agroforestry, soil health interventions: these reduce yield volatility under climate stress and protect your input cost trajectory.
Embed the climate spend inside procurement, not outside it. Treating climate risk as a sustainability cost line subordinates it to the ESG budget. Treating it as a procurement and resilience investment puts it in the budget that matters, which is the cost-of-goods budget that the CFO defends quarterly.
Nature-based supply chain investments are the asset class designed for exactly this purpose. They sit inside the value chain, they reduce climate-linked supply risk, they generate verifiable Scope 3 reductions, and they produce the documentation an auditor and a regulator can both test.
If you are quantifying climate-linked supply chain risk in advance of the next earnings cycle or the next disclosure period, the carbon and sustainability experts at Carbon Credit Capital can help you map your exposure and structure a Dual-Value Model response that addresses reduction, resilience, and disclosure-readiness in a single program. Schedule a consultation.
More and more small and medium-sized businesses are hearing the same question from their larger customers: What is your carbon footprint? That question now travels down entire supply chains, and it arrives next to tender requirements, certification criteria, and rising customer expectations.
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