Companies are racing to announce net-zero commitments. By some counts, over 90% of the global economy now operates under some form of climate pledge. On paper, this looks like progress. In practice, most of these targets share a fundamental problem: they're designed to sound ambitious while requiring minimal near-term action.

The gap between corporate climate announcements and the emissions reductions science demands is widening. Baseline manipulation, selective emission scoping, and technology assumptions that border on fantasy have become standard practice. These aren't always conscious deceptions—many result from genuine confusion about what credible target-setting requires.

Understanding why most corporate targets fall short isn't about cynicism. It's about identifying what separates meaningful commitments from sophisticated greenwashing. The difference determines whether we stabilize the climate or simply feel better about failing to do so.

A target is science-based when it aligns with the emissions reductions needed to limit warming to 1.5°C or well below 2°C. This sounds straightforward, but the translation from global carbon budgets to company-level commitments involves choices that dramatically affect ambition.

The Science Based Targets initiative (SBTi) has become the dominant validator of corporate climate targets. Yet even SBTi-approved targets vary enormously in rigor. Some companies commit to absolute emission reductions of 4-6% annually across their full value chain. Others achieve approval with intensity-based targets that allow absolute emissions to grow as the company expands.

The most common failure point is scope coverage. Scope 1 covers direct emissions from owned operations. Scope 2 covers purchased electricity. Scope 3 covers everything else—supply chains, product use, end-of-life treatment. For most companies, Scope 3 represents 70-90% of their climate footprint.

Many lauded corporate targets cover only Scopes 1 and 2, essentially claiming climate leadership while ignoring the vast majority of their impact. A fashion retailer reducing headquarters emissions while expanding manufacturing contracts with coal-powered suppliers isn't addressing climate change. It's addressing optics.

Takeaway

A target that excludes Scope 3 emissions is like a budget that ignores 80% of your spending—technically a plan, functionally a fiction.

The most popular target year is 2050. This is conveniently distant—far enough that current executives won't face accountability, current business models can continue unchanged, and current investors can exit before consequences materialize.

Distant targets without interim milestones create what economists call a time-inconsistency problem. Future commitments are costless to make. Near-term action is expensive. Without binding intermediate checkpoints, the rational strategy is perpetual delay disguised as long-term ambition.

The mathematics of emissions reduction make this delay catastrophic. Climate stabilization depends on cumulative emissions, not just the endpoint. A company reaching net zero in 2050 after minimal action until 2040 contributes far more to warming than one making steady reductions from 2025 onward.

Credible targets require milestones at five-year intervals with specific reduction requirements. These milestones need to be genuinely intermediate—not 5% reduction by 2030 followed by 95% between 2030 and 2050. The SBTi's Corporate Net-Zero Standard now mandates near-term targets covering 5-10 years, but enforcement remains weak and exemptions abundant. Without consequences for missed milestones, they function as aspirations rather than commitments.

Takeaway

A 2050 target without 2025 and 2030 milestones isn't a commitment—it's a press release with a very long expiration date.

Net-zero pathways increasingly rely on carbon dioxide removal (CDR) technologies that don't exist at scale. Companies assume future carbon capture will offset emissions they're unwilling to cut today. This isn't scenario planning—it's magical thinking embedded in spreadsheets.

Current global CDR capacity is roughly 0.01 gigatons annually. Net-zero scenarios typically assume 5-10 gigatons by 2050. Bridging this gap requires deployment rates never achieved for any technology, powered by clean energy systems we haven't yet built, at costs that remain economically unproven.

The asymmetry is telling: companies demand rigorous financial projections for near-term investments but accept wildly optimistic technology assumptions for emissions reductions. A CFO requiring detailed cost-benefit analysis for a new factory will approve a climate strategy assuming carbon capture costs drop 90% through undefined innovation.

Credible target-setting requires technology assumption auditing. Every ton of assumed future removal should be stress-tested: What if costs don't decline? What if deployment lags projections? What if permanence guarantees fail? Companies should demonstrate their targets remain achievable under pessimistic technology scenarios, not just optimistic ones. The emissions we don't emit remain the only guaranteed form of climate action.

Takeaway

Counting on future technology to solve today's emissions problem is like planning retirement around a lottery win—possible, but not a strategy.

Distinguishing credible climate targets from sophisticated greenwashing requires asking uncomfortable questions. Does the target cover the full value chain? Are there binding interim milestones with accountability mechanisms? Do technology assumptions survive pessimistic stress-testing?

Most corporate targets fail at least one of these tests. This isn't necessarily malice—the frameworks for credible target-setting are still evolving, and genuine ambition often collides with institutional constraints.

But understanding these failure modes matters. Investors directing capital, employees choosing employers, and consumers selecting products deserve tools for evaluating climate claims. The net-zero race means nothing if most runners aren't actually moving forward.