Corporate action on climate: Today’s competitive advantage

The corporate sustainability world is abuzz with reactions to the new SBTi Corporate Standard. The most notable piece to me is that they are trying to balance ambition and pragmatism. The new standard intentionally provides companies with more flexibility in how they pursue their climate goals, including through market mechanisms and new ways to demonstrate progress and investment. 

Why is this important? Because corporate climate action is essential to meeting our global net zero goals and right now, we’re at risk of back-tracking.  

2026 is a make-or-break moment for climate action.  We are just four years from 2030 and a quarter of the way to midcentury—two deadlines that will help determine whether we avoid the most dangerous impacts of climate change. The science is clear: global emissions must be cut roughly in half by 2030 and reach net zero by around midcentury. 

Yet headwinds companies are facing now are real. Climate solutions are scaling too slowly and often at prohibitive cost. Geopolitical shocks—war, tariffs, regulatory uncertainty—are compounding the pressure. Rising energy demands from AI are pushing emissions in the wrong direction. Meaningful reductions require change at every level of the supply chain.  

Right now, many companies are looking at their 2030 goals and quietly asking the same question: Do we pull back? Soften the target? Delay the disclosure? Drop out of the coalition? Wait out the political times?  

At EDF, we work with companies across sectors on exactly these decisions, and here’s what we’re telling them: Retreat is not the risk-managed choice it may appear to be. It’s the choice that creates the most vulnerability—to your competitive position and your ability to operate in a decarbonizing global economy that is not, in fact, slowing down.  

A recent PwC study makes clear – the business case for decarbonization has strengthened. Because of that core driver of action, 82% of companies are keeping their climate commitments steady or are accelerating timelines.  Demand for climate-related disclosures is growing globally. Access to markets such as the European Union and California —which together represent about 20% of the global economy—often requires companies to measure, report, and act on their climate emissions. 

Companies that demonstrate credible emissions performance will win contracts and retain market access, and those that can’t will lose ground. Dynamic, innovative and disrupting companies that are putting climate in their revenue growth plans are driving growth in Asia and globally. 

There is a path through this moment. It doesn’t require you to be the loudest company on climate. It requires you to be defined by action and transparency. How companies choose to navigate the next few years will shape not only their own resilience and competitiveness, but the future of the planet.  

Acting with integrity means focusing on what matters most. Here are five priorities: 

1. Stay focused on action 

Missing an interim target is one thing. Using this political moment as cover to walk away is a far costlier choice. Instead, double down on the actions within your control. 

Identify the two or three emissions hotspots that drive the bulk of your footprint — the commodities, categories, or activities that matter most — and demonstrate measurable progress on them. That means some combination of: 

• Acting: Deploy scalable emissions reductions inside your operations and value chain. Connect and align internally and externally to enable action. 

• Advocating: Work to remove the policy, market, or infrastructure barriers blocking adoption and proactively advocating for climate policy. 

• Advancing: Invest in R&D, pilots, or partnerships to unlock what doesn’t yet exist at scale. 

High integrity in this environment means prioritizing what matters most and going deeper where science-aligned impact is the greatest. Complexity can’t be an excuse to disengage. The truth is that the dates 2030 and 2050 are not magic, in and of themselves. The actions we take now add up. They will determine how challenging the road ahead will be and whether and when we will arrive at a climate-stable future.  

Companies that embed climate strategy into the business should be celebrated; they are driving positive financial performance, especially over the long term, and a thriving planet. The companies that should be called out are the ones that are failing their investors, communities and other stakeholders by doing nothing (or very little) at all. 

2. Keep the destination, even if you adapt the path 

The path to 2030 and 2050 was never going to be a straight line. Adapting as you go is needed to be agile in how you build to the new climate economy. Abandoning the goal is not.  In this moment it is critical to be honest about the path, show what you’re learning, and keep the destination intact. 

Adapt the how. Do not abandon the what. 

The truth is that an absolute target is necessary to hit net zero by mid-century for a liveable stable planet. SBTi may have changed requirements on a net zero targets for companies but that hasn’t changed our north star of net zero: The world needs to reduce emissions in absolute terms, in line with climate science. Intensity targets can be useful in the near term, allowing companies to grow while improving emissions performance. But the ultimate goal must be absolute emissions reductions– fully decoupling business growth from greenhouse gas emissions. Companies that work the hardest to innovate and grow while reducing their own emissions, and those of their value chain, have the best chance to compete and thrive.  

3. Show your work — especially the hard parts 

Communicating goals and action matters – it helps create the demand signal and expectations needed around the work it takes to make progress.  

The most credible corporate climate communicators are not always the ones with the glossiest reports. They’re the ones willing to say, “here’s what’s working, here’s what’s hard, here’s what we got wrong, and here’s specifically what we’re doing about it.”  

That looks like: 

• Honest communication about how you plan to hit your goals — or, if you’re off track, exactly why, what’s changed, and what you’re doing differently. 

• An assured, publicly disclosed GHG inventory built on international best practice. 

• Climate-related risk and opportunity transition planning and disclosure in line with leading frameworks (a new requirement from SBTi in the Corporate Net Zero Standard v2) – like ISSB’s IFRS Sustainability Disclosure Standards, built on TCFD, and the recommendations of the Transition Plan Taskforce. 

This approach aligns with SBTi’s new best-efforts framework that expects companies to use all available levers to decarbonize, and to be transparent about the implementation barriers that are facing as well as how they will address those. 

4. Put real governance behind it 

Strong internal governance is what distinguishes the companies that will manage risk, create value, and thrive over the long term from those that will be left behind.  

High-integrity governance in this environment includes: 

• Board-level oversight of climate, not a once-a-year ESG committee check-in. 

• A cross-functional internal team driving implementation against clear business-aligned climate KPIs. 

• Executive incentives meaningfully tied to sustainability-aligned business outcomes. 

• Senior leaders with climate accountability, who have a real seat at the strategy table. 

Strong governance is what makes climate work survive political cycles, CEO transitions, and budget pressure. A climate strategy that is, at its core, about good business and is embedded into how the business actually makes decisions will ensure both action and investment. 

5. Take a whole value chain approach 

For most companies, the largest share of emissions—and the largest share of climate-related risk and commercial opportunity—sits outside the company’s four walls. It’s in suppliers, logistics, and the use of sold products. 

Many companies may be tempted to ease off climate expectations in their value chains because it’s the least visible and it’s complex and difficult to influence. 

That would be a mistake. Your demand signal to suppliers is one of the most powerful levers you have. Activating it and keeping it on reduces your exposure to commodity and regulatory shocks and positions you to capture the upside as low-carbon alternatives scale.  

Setting clear expectations, engaging suppliers and consistently co-investing in their decarbonization through financial and non-financial incentives enables a transition that will benefit the entire value chain. That, coupled with work to innovate products, processes and culture, can unlock efficient and effective action to address climate risk and opportunities. 

The choice in front of you. 

The next four years will define which companies are built to last. The ones that emerge strongest will be the most focused, the most honest, the most driven by long-term business value creation, and the most engaged across their value chain. That’s the path with integrity. And it’s the one that leaves you competitive, credible, and ready for what comes next.