In May, PepsiCo released a big reworking of its sustainability goals. The company retired some of its pledges, particularly around water, because it had met them already. Others, including decarbonization targets, were softened or delayed. As Jim Andrew, the company’s chief sustainability officer, told me in September: since PepsiCo set the goals in 2021 “a lot changed, and we’ve learned.”
No one likes to admit failure, least of all publicly traded companies. Big firms worry about how every pronouncement may rattle customers, regulators, and shareholders—and executives often hope that big initiatives will fade away unnoticed rather than attract attention as they end.
When it comes to talking about climate action, this is a big problem. Across the economy, companies are falling behind on their environmental goals. In some cases, that can be attributed to egregious abandonment or benign neglect. But in many others the struggle is the result of economic and social realities not evolving rapidly enough to make some of the most ambitious goals possible. Capital is tighter; policy whiplash is real, especially in the U.S. “It is virtually impossible for that to move faster than the world is moving,” says Andrew of the company’s supply chain decarbonization goal.
Indeed, few companies can effectively move against the tide on their own. Rather than viewing delayed or missed targets as a taboo topic, the first step to shifting the tide back in the right direction and getting past those challenges is to talk about them.
Behind closed doors, it’s easy to get a sense of the state of corporate action on climate. Executives remain committed to addressing climate change even as they see the lofty goals set years ago slipping through their fingers.
That observation—based on my conversations with leaders across corporate America—is backed up by data. A survey of more than 4,000 companies released earlier this year by consulting firm PWC found that the number of companies with climate pledges continues to grow and that the work has continued through leadership changes within companies. At the same time, survey data shows only around half of these companies are on track to meet their targets for decarbonizing their operations and supply chains.
But the public conversation looks a little different. Companies remain silent—a practice called greenhushing where executives or PR teams avoid talking about climate initiatives, successes and failures alike. Despite that, I’ve been able to have some really frank conversations with corporate leaders over the course of the year, some on the record and many more off the record, about how to talk about their challenges.
Last month, I published a feature on how JPMorgan is currently thinking about climate change. The company’s top executives said that they had built the expertise and staffing necessary to meet its goals. But, at the same time, they acknowledged that the company may not meet its targets as it responds to a shifting market. “It’s going to depend a little on how open and receptive the capital markets are,” Doug Petno, co-CEO of JPMorgan’s commercial and investment bank, told me.
The rapid growth in electricity demand has shifted the math for many companies, too. Kathleen Barrón, chief strategy and growth officer at Constellation Energy, explained to me on a panel that her company’s push for decarbonization remains constant, but that they would need to “reformulate what our internal goals are” as the result of an ongoing acquisition of Calpine, a power company with significant natural gas assets. “There are a lot of companies with very, very aggressive goals that they will be challenged to meet,” she said. “And how we rethink that but still have ambition is what matters.”
One common takeaway from my conversations on this topic is that a broader systemic shift is necessary to enable companies to meet their goals. Policies and consumer demand will unlock a green transition in a way that a simple pledge could never do. That doesn’t mean that corporate feet shouldn’t be held to the fire. Those missed targets aren’t abstract; they translate to higher absolute emissions and leave transition risk on the balance sheet. And big companies, which remain powerful societal actors, should embrace nascent ways to push back some of the roadblocks. Programs where major companies stimulate the market for clean technologies have an important role to play and will need to continue and expand. Corporate lobbying efforts can sometimes move the needle on policy at the margins.
So what’s the point of goals if companies will simply blame the economic environment when they don’t meet them? And how do we distinguish between that and companies that are simply running away? Most importantly, we have to look at what companies have actually done—building teams, creating new products, and developing road maps all indicate seriousness, even if markets haven’t responded yet. For industrial firms, a key indicator is seeing what new infrastructure they’re building. But ultimately, to build trust, and help the world understand the market challenges, companies need to embrace some degree of transparency.
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