In May, PepsiCo significantly revised its sustainability objectives. The corporation withdrew several commitments, especially those concerning water, having already achieved them. Other targets, such as those for decarbonization, were either moderated or postponed. According to Jim Andrew, PepsiCo’s chief sustainability officer, in September, “much has evolved, and we have gained new insights” since the company established these goals in 2021.

Admitting shortcomings is unpopular, particularly for publicly traded corporations. Major businesses fear that any public statement could unsettle customers, regulatory bodies, and investors. Executives frequently prefer that significant projects conclude without drawing attention, rather than becoming subjects of scrutiny.

This reluctance poses a significant challenge when discussing climate initiatives. Throughout the economy, businesses are struggling to meet their environmental objectives. While some instances may stem from severe neglect or outright abandonment, many difficulties arise because economic and social conditions are not progressing quickly enough to enable the achievement of ambitious targets. Capital availability is constrained, and policy instability, particularly in the U.S., is a genuine factor. Andrew remarked on the company’s supply chain decarbonization goal, stating, “It is practically impossible for that to accelerate beyond the pace of global movement.”

Indeed, few companies can successfully counteract prevailing trends independently. Instead of treating delayed or unfulfilled targets as a forbidden subject, the initial action required to steer progress back on course and overcome these obstacles is open discussion.

In private discussions, it becomes clear what the status of corporate climate action truly is. Leaders maintain their dedication to tackling climate change, even as ambitious goals established years prior prove increasingly difficult to achieve.

This insight, drawn from discussions with American corporate leaders, is supported by empirical evidence. A recent study by consulting firm PwC, involving over 4,000 companies, revealed a sustained increase in the number of firms making climate commitments and ongoing efforts despite leadership transitions. However, concurrently, survey data indicates that only about fifty percent of these companies are progressing toward their goals for decarbonizing operations and supply chains.

Yet, the public discourse presents a different picture. Companies often maintain silence, a phenomenon termed “greenhushing,” where executives or public relations departments refrain from discussing climate initiatives, whether successful or not. Nevertheless, I have engaged in candid conversations with corporate leaders throughout the year, both on and off the record, regarding how to address their difficulties.

Last month, I reported on JPMorgan’s current perspective on climate change. The company’s senior executives stated they have developed the necessary expertise and personnel to achieve their objectives. Simultaneously, however, they recognized that the firm might not reach its targets given the evolving market conditions. Doug Petno, co-CEO of JPMorgan’s commercial and investment bank, commented, “It will depend somewhat on the openness and receptiveness of the capital markets.”

The swift increase in electricity demand has also altered calculations for numerous companies. Kathleen Barrón, chief strategy and growth officer at Constellation Energy, explained during a panel discussion that while her company’s dedication to decarbonization persists, they would need to “re-evaluate our internal goals” due to the ongoing acquisition of Calpine, a power company possessing substantial natural gas assets. She noted, “Many companies have extremely ambitious goals that they will find difficult to achieve. The key lies in how we reconsider these goals while retaining our ambition.”

A consistent theme from my discussions on this subject is the necessity of a wider systemic transformation to empower companies to achieve their objectives. Government policies and consumer preferences will facilitate a green transition in a manner that mere commitments cannot. This does not imply that corporations should not be held accountable. Unmet targets are not theoretical; they result in elevated absolute emissions and introduce transition risk onto financial statements. Furthermore, large corporations, which wield considerable societal influence, ought to adopt emerging strategies to mitigate various impediments. Programs where significant companies stimulate the market for clean technologies play a vital role and require continuation and expansion. Corporate advocacy can occasionally influence policy at the periphery.

This raises the question: what is the purpose of setting goals if companies will merely attribute their failure to meet them to the economic climate? And how can we differentiate between legitimate challenges and companies simply evading responsibility? Crucially, we must examine companies’ tangible actions—establishing teams, innovating new products, and crafting strategic roadmaps all signal commitment, even if market reactions are yet to materialize. For industrial enterprises, a primary indicator is observing new infrastructure development. Ultimately, however, to foster trust and facilitate global comprehension of market difficulties, businesses must adopt a certain level of openness.

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