Dive Brief:
- Most companies who have set science-based climate targets witnessed a net-positive impact on their corporate reputation, climate ambition and pace of decarbonization, according to a report the Science Based Targets initiative released Monday.
- Responses were collected from 171 companies who have had an SBTi-validated target in place for more than two years, and the report is also based on 22 case studies. From the companies surveyed, 95% reported positive reputational effects, 90% said the goals positively impacted their climate ambition and 86% said having the goals positively impacted their decarbonization pace.
- The number of companies with climate targets has more than tripled since 2023, with nearly 11,000 global companies either having or committing to set SBTi-validated climate targets as of the end of June. SBTi said such companies represent 25% of global revenue and over 40% of the global market cap.
Dive Insight:
In addition to reputational and climate benefits, SBTi’s report found that companies with validated targets saw strategic benefits to their operations and a positive impact to various aspects of their investor relations.
The report included case studies and insights from corporations including beverage producer Heineken, renewable energy company ReNew and French private equity firm PAI Partners. Leaders from Lenovo and the Economist Group also said in a release that having science-based targets aided the companies’ strategies and decarbonization pace.
“Companies now have a clear business case” for setting science-based climate targets, SBTi CEO David Kennedy said in a Nov. 3 press release.
“These results show that ambitious climate action isn’t just good for the planet — it drives competitiveness, investor confidence, and long-term growth,” Kennedy said. “In a volatile world, continuing to act boldly on climate, guided by robust, science-based frameworks, secures stronger preparedness for market demands, risk management and growth planning.”
Seventy-three percent of respondents reported a somewhat or very positive impact on overall company strategy, and 80% of respondents said the targets had a positive impact on the company’s strategic cohesion and long-term vision, according to the report. A majority of respondents also said such targets had positive impacts on their alignment with supply chain and client requirements (74%), resilience against regulatory changes (71%) and competitiveness compared to industry peers (67%).
Companies also reported that their investor and partner relations improved as a result of the targets. The targets had a positive impact on: 80% of respondents’ investor perception and client relations, 69% of respondents’ perception as a supplier and 56% of respondents’ relationships with their supply chain.
“The evidence so far consistently shows that having science-based targets is associated with meaningful, firm-level emissions reductions, particularly when targets are externally validated and data is assured,” the report said. “Benefits accumulate over time rather than immediately, and progress on scope 3 remains the most significant hurdle for both companies and researchers.”
While most companies reported neutral impacts on most financial-related questions, a majority found positive impacts on investor confidence (76%) — which can aid capital access — and operational efficiency (51%).
