Insights

In recent years, “net zero” became the gold standard for corporate climate ambition. From Fortune 500s to mid-sized enterprises, companies rushed to make bold pledges to eliminate or offset their carbon emissions. However, the tide is shifting. Increasingly, firms are walking back, softening, or even abandoning their net zero commitments altogether.

This change is not just about corporate reluctance—it reflects deeper tensions in how sustainability targets are set, measured, and delivered. Many companies are realizing that the path to net zero is far more complex than initially presented. Achieving it requires systemic shifts in operations, supply chains, financing, and technology—areas where progress is often slow, fragmented, or dependent on external actors.

Another factor driving the retreat is mounting scrutiny. Stakeholders, regulators, and civil society are demanding greater transparency and scientific credibility around climate claims. Companies that once gained reputational benefits from ambitious announcements now face accusations of “greenwashing” if their actions fail to match their promises. In some markets, particularly the US, political pushback against ESG and climate-linked commitments has further complicated the business case for sticking with net zero targets.

At the same time, the absence of universally accepted standards has left firms exposed. Without clarity on what counts as credible offsets, interim targets, or transition plans, many organizations prefer to downgrade their language—shifting from “net zero” to more flexible terms like “carbon neutrality” or “low carbon.” This creates more maneuverability but also risks diluting global progress.

What emerges is not necessarily a rejection of climate action, but a recalibration. Companies are beginning to prioritize transparency over ambition, opting for incremental improvements that can be demonstrated and verified. Rather than promising sweeping transformation by mid-century, businesses are breaking commitments into shorter-term, achievable milestones.

The lesson here is clear: climate strategies must be grounded in operational realities, supported by robust data, and communicated with honesty. Net zero is not disappearing—it is evolving. The challenge now is to move from aspirational rhetoric to credible execution, ensuring that sustainability efforts remain impactful while also aligned with business performance.