Corporate climate commitments remain strong, despite headlines of retreat
A new report from PwC reveals that, contrary to reports suggesting a decline in corporate sustainability efforts, a growing number of companies are firmly committing to climate initiatives. The 2025 State of Decarbonization report indicates that over 4,000 firms reported climate commitments through the CDP in 2024, marking a nine-fold increase over the past five years.
The study highlights that 37% of companies are enhancing their sustainability ambitions, while only 16% are scaling back. This shift includes a notable rise in commitments from smaller companies, as the median revenue of firms making promises fell from £3.6 billion in 2020 to £1.3 billion in 2024.
Research conducted by PwC demonstrates that 83% of companies are investing in research and development for low-carbon products and services, with sustainable product features reportedly yielding a revenue increase of 6% to over 25%. Furthermore, the report states that 84% of companies have maintained their climate pledges even through leadership changes, with no firms retracting their commitments after CEO transitions.
Despite some firms adjusting their targets to lower ambitions, often reflecting a more realistic approach with detailed planning, these companies typically remain committed to their climate goals. Over half of those recalibrating their expectations are involved in robust planning efforts, ensuring that resource allocation towards their climate objectives continues effectively.
PwC employed AI to analyse data from over one million long-form responses, allowing for a focus on individual company ambitions and progress rather than standardised targets. This method reveals how effectively firms are executing their decarbonisation strategies, offering insights into governance, funding for sustainability initiatives, and stakeholder engagement.
While progress is evident in reducing Scope 1 and 2 emissions, the report underscores that less than half of the companies are on track with Scope 1 targets and just over half with Scope 3 targets. Scope 3 emissions, which encompass those occurring throughout a product’s lifecycle, represent a significant area for improvement as many organisations are only beginning their decarbonisation journeys.
The report identifies four key themes for successful decarbonisation: robust governance of sustainability initiatives, secure funding, effective engagement with suppliers and customers, and a focus on reducing Scope 3 emissions. Companies that integrate these aspects are better positioned to enhance revenue and competitiveness.
Despite the challenges, many executives recognise decarbonisation as a strategic priority, underscoring a potential for long-term growth linked to climate initiatives. The report concludes that as organisations increasingly focus on sustainability, significant revenue and margin opportunities are likely to emerge from this transition.
