Closing the Climate Action Gap

Faced with geopolitical uncertainty and market volatility, business leaders might feel the need to deprioritize climate commitments. But the success of their companies—and the future of the planet—rests on converting those pledges into action.

Climate change remains a threat, but the world has made great strides in the past three decades.

Glacier - Closing the Climate Action Gap

The average rise in global temperatures is slowing, and net zero has become the norm.


The heaviest-emitting sectors—energy, industrials, transport, and agriculture among them—have been critical leaders in the cross-industry effort to become more sustainable.


Corporations, governments, and individuals are taking action to avoid further warming. Brands are increasingly climate positive, removing more carbon from the atmosphere than they emit.


Efforts aimed at improving biodiversity and water security—and decreasing pollution and food waste—have also gained broad support and sufficient funding to make a positive impact.

While plenty of work remains, sustainability no longer feels like a distant goal—we’re well on our way to achieving it.

How did we get here?

Time Is Running Out

There’s no sugar coating it: the above scenario is becoming less likely with each passing day.


But it’s still within our grasp. To get there, tackling climate change must remain a top priority for businesses everywhere.

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For leaders, the imperative is clear.

It’s time to close the climate action gap.

Spread the word:

Ambition ≠ Action

While many companies have announced their intention to reduce emissions, achieve net zero, and deliver on other climate goals, few have made it far along the journey.

  • Over
    Forbes Global 2000 companies have committed to reach net zero by 2050…
  • but just
    63 %
    have set the kind of interim targets that are critical to reaching this goal.
  • Some
    96 %
    of large businesses have set targets for reducing emissions in at least one scope…
  • but only
    11 %
    have cut their emissions in line with their ambitions over the past five years.
  • About
    75 %
    of board directors report that ESG considerations are an integral part of their purpose and values…
  • but
    71 %
    said their company is only moderately or not at all effective at governing ESG issues.

What’s standing in their way?

Stumbling Blocks

To make progress on realizing their climate commitments, leaders need a clear, aspirational vision and a detailed roadmap for execution.

The first takes courage—a willingness to look beyond short-term pressures to confront an even greater problem. The second takes resources—the knowledge and institutional backing required to make actual progress. But companies also face some practical obstacles to closing the climate action gap:

Accurate Emissions Measurement

Few companies have a comprehensive understanding of their greenhouse-gas output—or the impact of those emissions.

Just 9% of companies measure their total emissions comprehensively; 81% omit some of their Scope 1 and 2 emissions, and 66% do not report any of their Scope 3 emissions. What’s more, companies estimate an average error rate of 30% to 40% in the measurements they do make. Without understanding the full extent and composition of their total emissions, companies won’t know where to prioritize their reduction efforts—or how to measure their progress accurately.

Climate Action as a Moving Target

The science on climate change continues to evolve. Companies must continuously adapt their responses as a result.

While limiting the temperature increase to “well below 2°C” was considered a reasonable goal a few years ago, the latest research suggests that every additional fraction of a degree has a profound impact. As the rate of actual temperature increase and the pace of emission reductions change, abatement targets and pathways may need to change with them. Given these circumstances, making commitments—and setting the targets to meet them—is a significant challenge.

Unclear Roles and Responsibilities

Companies can’t deliver meaningful results without establishing clear accountability for sustainability goals and initiatives.

Since net-zero goals often require considerable cross-functional coordination to achieve, confusion over which part of an organization is responsible for which activities can create overlapping remits and slow down progress. The result? Confused execution and duplication of resources.

Variation in Regional Laws and Regulations

Sustainability efforts vary widely across different regions, as do laws and regulations related to climate.

Companies with operations and supply chains in regions that have yet to take aggressive climate action may struggle to find support for their emissions-reduction efforts from governments or citizens. Meanwhile, regions that are leading on climate efforts are finding it difficult to translate their ambitions into policies—and companies operating in these locations are uncertain whether moving quickly to slash emissions could generate a competitive disadvantage.

At-Scale Deployment of New Technologies

Deployment comes with some significant obstacles, including uncertainty about projected costs and effectiveness.

Reaching longer-term targets, particularly those in high-emitting sectors, will require new technologies. Moreover, current assets in these sectors have long lifespans and high capital expenditures—making it likely that companies that adopt new technologies will incur major losses if they need to decommission legacy assets earlier than planned. Without the right regulations, policies, and investments, there is a risk that abatement progress stalls in heavy-emitting sectors after the easy-to-abate emissions have been eliminated.

How to Close the Climate Action Gap

Plotting a clear and certain path to sustainability is challenging. But that shouldn’t prevent leaders from turning their climate commitments into climate action. Here are five critical steps.

Unlocking Opportunity

The past few years have presented leaders with acute, unprecedented challenges.

Ongoing supply chain pressures, geopolitical tensions, market volatility, talent shortages, and other issues are making it exceedingly difficult to look beyond the immediate demands of shareholders and the necessities of short-term survival.

But the greatest disruption to business won’t be encountered tomorrow.

It’s already happening today.

Continued lack of action will only increase the scale of emissions reductions required down the road and raise the risks of extreme weather events and other climate-related catastrophes.

CEOs are right to be alarmed—but they have every reason to be excited.

The Sustainable Advantage: Insights on Creating Competitive Advantage Through Sustainability


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