By Swastika Singha Published on : May 16, 2025
Pop quiz:
Which of these companies have made climate pledges for 2030?
A. Microsoft
B. Unilever
C. Nestlé
D. All of the above
If you guessed D, you’re right. But here’s the better question—how many of them are on track?
The answer: Very few.
The disconnect between sustainability intentions and actions has become a defining challenge in corporate ESG narratives. Green initiatives abound in annual reports, yet meaningful change remains sluggish.
Over the last decade, the corporate world has seen an explosion of sustainability commitments. From carbon-free aspirations to zero-waste production to ethical procurement, the eco-vocabulary has seeped into corporate speak. Yet while sustainability aspirations are louder and more vocal than ever, the real effect of these promises is uncertain.
The increasing gap between what companies claim and what they do has become a test of crucial scrutiny. Why should so many organizations fail in executing the very green commitments they evangelize? It's because of a matrix of systemic, operating, and psychological obstacles—most of which are highly embedded in the prevailing business model.
The move towards climate commitments isn't entirely misplaced. Rising consumer consciousness, investor activism, regulatory systems, and international agreements such as the Paris Agreement have compelled firms to act. A 2023 McKinsey report found that 90 percent of S&P 500 firms now release some type of ESG (Environmental, Social, and Governance) reporting, and more than 70 percent have established public climate commitments.
On the surface, this is encouraging progress. But the real-world reality is more somber. The majority of these commitments are long-term—2040 or 2050—with no immediate short-term targets. Meanwhile, it is thin on evidence of actual meaningful carbon reduction.
Research by the NewClimate Institute in collaboration with Carbon Market Watch assessed 25 of the globe's biggest companies on their climate action plans. Just three companies—Maersk, Vodafone, and Deutsche Telekom—had plans that were in line with the international climate objectives established in the Paris Agreement. The others were far from it.
Major takeaways were vague terms such as "net zero," overdependence on carbon offsetting, and absence of interim reporting. For most firms, these climate plans were a form of reputational insulation rather than actual-world change.
This trend is an example of a common phenomenon: sustainability commitments are being made quicker than they are being implemented.
Explaining the intent-action gap involves unpeeling the multiple layers of complexity around implementing sustainability.
1. Profit Pressure vs. Planet Targets
Sustainability tends to mean changing structures that disrupt the business-as-usual paradigm. Whether it's a switch to renewable energy, rethinking logistics, or reinventing product lines to be circular, such transitions tend to be capital-intensive. For publicly traded companies with quarterly earnings pressures, such investments over the long term tend to be at odds with shareholder expectations.
A Harvard Business Review analysis discovered that merely 25 percent of top executives thought sustainability spending had a positive influence on immediate profits. Until the financial calculation balances with environmental objectives, implementation will stay limited by budgetary reservations.
2. Greenwashing as a Shortcut
When promotion outpaces execution, greenwashing is a convenient cop-out. Companies show a superficial image of sustainability by highlighting incremental changes, while the significant issues remain unaddressed.
A typical case in point is the clothing industry. A few of the major clothing chains have introduced "conscious" or "eco" lines with a tiny proportion of recycled content. But watchdog investigations have revealed that many such ranges entail minimal real environmental gain, with some operations even producing higher emissions than regular manufacturing.
This behavior undermines consumer trust and muddies the waters for genuine sustainability leaders, creating an environment where surface-level change is rewarded over substance.
3. Complexity of Supply Chains
One of the scariest issues brands grapple with is in their supply chains. Corporate emissions are usually broken down into three types: Scope 1 (emissions that are directly emitted), Scope 2 (indirect emissions caused by energy purchased), and Scope 3 (all the other indirect emissions through the value chain). For most corporations, Scope 3 emissions account for more than 70 percent of their carbon footprint.
Tackling such emissions involves dealing with third-party suppliers—many of whom are based in countries with poor environmental controls or incomplete data infrastructure. This makes it virtually impossible to follow, manage, or convert sustainability practices across the board.
For example, a firm such as Nestlé might have ambitious carbon-reduction targets, but their achievement is contingent on upstream agriculture practices in cocoa, palm oil, and dairy, all of which are accompanied by deeply rooted environmental and social problems.
4. Lack of Standardized Metrics
One of the basic flaws of existing ESG practices is the lack of uniform, universally accepted measurement frameworks. Even phrases like "carbon neutral," "net zero," or simply "sustainable" do not have globally accepted definitions. This facilitates selective reporting by brands that usually presents a good picture through chosen metrics while excluding those that show more underlying failings.
A 2022 survey by PwC found that 59 percent of business executives are convinced there is not enough credible data to inform ESG decisions. Untransparency and unstandardization impede accountability, but they also permit green marketing promises to go untested.
Closing the intent-action gap means companies need to transition from performative sustainability to action-oriented strategy. Doing it is not easy, nor is it quick, but it must be done.
1. Establish Short-Term, Quantifiable Targets
Long-term objectives are valuable for setting vision, but unless there are specific short-term milestones, they tend to become irrelevant. Firms need to develop yearly or every-other-year sustainability targets with exact KPIs, and track progress with the same level of detail as financial performance.
Microsoft is a good example. Its commitment to being carbon negative by 2030 has a comprehensive roadmap, public disclosure, and yearly progress reporting. The model offers transparency and encourages accountability.
2. Embed Sustainability into Core Business Operations
Environmental strategy cannot be left in the hands of a single ESG department without being integrated into procurement, product development, logistics, HR, and even sales. Only when sustainability is incorporated into day-to-day decision-making can actual change happen.
Firms such as Patagonia have woven sustainability into corporate culture—from material sourcing to executive incentive schemes linked to environmental performance. This integration avoids keeping sustainability as a side activity and incorporates it as a center operational principle.
3. Adopt Independent Verification and Standards
Brands should have their climate plans third-party audited and sign up to globally accepted standards like the Science-Based Targets initiative (SBTi), the Carbon Disclosure Project (CDP), or B Corp certification. Third-party verification gives credibility and ensures sectoral consistency.
Most importantly, it removes performative commitments from real action by giving an unbiased review of progress.
4. Practice Transparent Communication
Brands must shift away from sanitized PR speak and towards a more authentic, open conversation with stakeholders. That includes reporting on both successes and failures, emphasizing the messiness of the journey, and getting honest about trade-offs.
Sustainability is not an either-or achievement, but an ongoing process. Brands that openly acknowledge this fact garner more respect and participation from consumers, investors, and employees.
While the responsibility lies with businesses to make good on their commitments, stakeholders such as consumers, regulators, investors, and employees have a critical role in calling for accountability.
NielsenIQ research indicates that 73 percent of consumers worldwide are prepared to shift habits to lower their environmental footprint and that 41 percent are ready to pay more for environmentally friendly offerings. The pressure of such demand can transform supply-side behavior—if sustained consistently.
Staff, also, are leading from within. Younger generations prefer to work for organizations that share similar values. This shift in culture in the workforce can speed up strategic alignment between practice and purpose.
The disconnect between green intention and effective action is no longer a corporate shortcoming—it's a reputational risk and, more fundamentally, an existential one. With climate change picking up speed and stakeholder expectations increasing, companies can no longer afford to view sustainability as a brand play.
To bridge this gap, companies need to make a commitment to systemic, transparent, and measurable change. What that entails is building sustainability into operations, aligning incentives, facing uncomfortable realities, and adopting a culture of constant accountability.
The future won't be made by people who make promises. It will be made by those who deliver on them.
Pop quiz:
Which of these companies have made climate pledges for 2030?
A. Microsoft
B. Unilever
C. Nestlé
D. All of the above
If you guessed D, you’re right. But here’s the better question—how many of them are on track?
The answer: Very few.
The disconnect between sustainability intentions and actions has become a defining challenge in corporate ESG narratives. Green initiatives abound in annual reports, yet meaningful change remains sluggish.
Over the last decade, the corporate world has seen an explosion of sustainability commitments. From carbon-free aspirations to zero-waste production to ethical procurement, the eco-vocabulary has seeped into corporate speak. Yet while sustainability aspirations are louder and more vocal than ever, the real effect of these promises is uncertain.
The increasing gap between what companies claim and what they do has become a test of crucial scrutiny. Why should so many organizations fail in executing the very green commitments they evangelize? It's because of a matrix of systemic, operating, and psychological obstacles—most of which are highly embedded in the prevailing business model.
The move towards climate commitments isn't entirely misplaced. Rising consumer consciousness, investor activism, regulatory systems, and international agreements such as the Paris Agreement have compelled firms to act. A 2023 McKinsey report found that 90 percent of S&P 500 firms now release some type of ESG (Environmental, Social, and Governance) reporting, and more than 70 percent have established public climate commitments.
On the surface, this is encouraging progress. But the real-world reality is more somber. The majority of these commitments are long-term—2040 or 2050—with no immediate short-term targets. Meanwhile, it is thin on evidence of actual meaningful carbon reduction.
Research by the NewClimate Institute in collaboration with Carbon Market Watch assessed 25 of the globe's biggest companies on their climate action plans. Just three companies—Maersk, Vodafone, and Deutsche Telekom—had plans that were in line with the international climate objectives established in the Paris Agreement. The others were far from it.
Major takeaways were vague terms such as "net zero," overdependence on carbon offsetting, and absence of interim reporting. For most firms, these climate plans were a form of reputational insulation rather than actual-world change.
This trend is an example of a common phenomenon: sustainability commitments are being made quicker than they are being implemented.
Explaining the intent-action gap involves unpeeling the multiple layers of complexity around implementing sustainability.
1. Profit Pressure vs. Planet Targets
Sustainability tends to mean changing structures that disrupt the business-as-usual paradigm. Whether it's a switch to renewable energy, rethinking logistics, or reinventing product lines to be circular, such transitions tend to be capital-intensive. For publicly traded companies with quarterly earnings pressures, such investments over the long term tend to be at odds with shareholder expectations.
A Harvard Business Review analysis discovered that merely 25 percent of top executives thought sustainability spending had a positive influence on immediate profits. Until the financial calculation balances with environmental objectives, implementation will stay limited by budgetary reservations.
2. Greenwashing as a Shortcut
When promotion outpaces execution, greenwashing is a convenient cop-out. Companies show a superficial image of sustainability by highlighting incremental changes, while the significant issues remain unaddressed.
A typical case in point is the clothing industry. A few of the major clothing chains have introduced "conscious" or "eco" lines with a tiny proportion of recycled content. But watchdog investigations have revealed that many such ranges entail minimal real environmental gain, with some operations even producing higher emissions than regular manufacturing.
This behavior undermines consumer trust and muddies the waters for genuine sustainability leaders, creating an environment where surface-level change is rewarded over substance.
3. Complexity of Supply Chains
One of the scariest issues brands grapple with is in their supply chains. Corporate emissions are usually broken down into three types: Scope 1 (emissions that are directly emitted), Scope 2 (indirect emissions caused by energy purchased), and Scope 3 (all the other indirect emissions through the value chain). For most corporations, Scope 3 emissions account for more than 70 percent of their carbon footprint.
Tackling such emissions involves dealing with third-party suppliers—many of whom are based in countries with poor environmental controls or incomplete data infrastructure. This makes it virtually impossible to follow, manage, or convert sustainability practices across the board.
For example, a firm such as Nestlé might have ambitious carbon-reduction targets, but their achievement is contingent on upstream agriculture practices in cocoa, palm oil, and dairy, all of which are accompanied by deeply rooted environmental and social problems.
4. Lack of Standardized Metrics
One of the basic flaws of existing ESG practices is the lack of uniform, universally accepted measurement frameworks. Even phrases like "carbon neutral," "net zero," or simply "sustainable" do not have globally accepted definitions. This facilitates selective reporting by brands that usually presents a good picture through chosen metrics while excluding those that show more underlying failings.
A 2022 survey by PwC found that 59 percent of business executives are convinced there is not enough credible data to inform ESG decisions. Untransparency and unstandardization impede accountability, but they also permit green marketing promises to go untested.
Closing the intent-action gap means companies need to transition from performative sustainability to action-oriented strategy. Doing it is not easy, nor is it quick, but it must be done.
1. Establish Short-Term, Quantifiable Targets
Long-term objectives are valuable for setting vision, but unless there are specific short-term milestones, they tend to become irrelevant. Firms need to develop yearly or every-other-year sustainability targets with exact KPIs, and track progress with the same level of detail as financial performance.
Microsoft is a good example. Its commitment to being carbon negative by 2030 has a comprehensive roadmap, public disclosure, and yearly progress reporting. The model offers transparency and encourages accountability.
2. Embed Sustainability into Core Business Operations
Environmental strategy cannot be left in the hands of a single ESG department without being integrated into procurement, product development, logistics, HR, and even sales. Only when sustainability is incorporated into day-to-day decision-making can actual change happen.
Firms such as Patagonia have woven sustainability into corporate culture—from material sourcing to executive incentive schemes linked to environmental performance. This integration avoids keeping sustainability as a side activity and incorporates it as a center operational principle.
3. Adopt Independent Verification and Standards
Brands should have their climate plans third-party audited and sign up to globally accepted standards like the Science-Based Targets initiative (SBTi), the Carbon Disclosure Project (CDP), or B Corp certification. Third-party verification gives credibility and ensures sectoral consistency.
Most importantly, it removes performative commitments from real action by giving an unbiased review of progress.
4. Practice Transparent Communication
Brands must shift away from sanitized PR speak and towards a more authentic, open conversation with stakeholders. That includes reporting on both successes and failures, emphasizing the messiness of the journey, and getting honest about trade-offs.
Sustainability is not an either-or achievement, but an ongoing process. Brands that openly acknowledge this fact garner more respect and participation from consumers, investors, and employees.
While the responsibility lies with businesses to make good on their commitments, stakeholders such as consumers, regulators, investors, and employees have a critical role in calling for accountability.
NielsenIQ research indicates that 73 percent of consumers worldwide are prepared to shift habits to lower their environmental footprint and that 41 percent are ready to pay more for environmentally friendly offerings. The pressure of such demand can transform supply-side behavior—if sustained consistently.
Staff, also, are leading from within. Younger generations prefer to work for organizations that share similar values. This shift in culture in the workforce can speed up strategic alignment between practice and purpose.
The disconnect between green intention and effective action is no longer a corporate shortcoming—it's a reputational risk and, more fundamentally, an existential one. With climate change picking up speed and stakeholder expectations increasing, companies can no longer afford to view sustainability as a brand play.
To bridge this gap, companies need to make a commitment to systemic, transparent, and measurable change. What that entails is building sustainability into operations, aligning incentives, facing uncomfortable realities, and adopting a culture of constant accountability.
The future won't be made by people who make promises. It will be made by those who deliver on them.
