The Quiet Climate Revolution.

Despite recent headlines suggesting a corporate pullback from environmental commitments, PwC’s Second Annual State of Decarbonization Report reveals a different picture; one of resilience, recalibration, and progress. In analyzing the latest corporate CDP reports, PwC uncovered the promising trend that organizations are steadily and strategically advancing their sustainability agendas, albeit quietly. While public narratives have cooled, real climate progress is accelerating methodically, strategically, and often without fanfare.

In 2024, more than 4,000 companies reported climate commitments to CDP, up 9x from just five years ago. Beyond the volume of submissions, today’s organizations are also demonstrating durability. Even when CEOs stepped down, companies stayed the course, with none of the 47 PwC-tracked companies that experienced a CEO transition during the reporting period backing off of net-zero targets. And it’s not just the Fortune 500 leading the charge; smaller companies are increasingly setting targets because their customers are asking for it. As major buyers push to address Scope 3 emissions, the ripple is reaching every corner of the value chain.

Execution varies by scope and sector.

• 67% of companies are on track for Scope 1 and 2 targets (up from 64% in 2023)::
  • Among on-track companies, 51% of achieved reductions have originated from Scope 1 emissions in the energy, metals and mining, and construction sectors.
  • Most on-track companies are achieving more reductions in Scope 2 emissions; with aggregate year-over-year reductions of 12% in Scope 2 but just 6% in Scope 1.
• Only 54% of companies are on track for Scope 3, despite it making up >90% of total emissions in many sectors.
• Hard-to-abate sectors (e.g., metals, mining, logistics) face the greatest challenges in Scope 1 but are testing next-gen solutions (e.g., SAF, CCUS, electrification).

Governance, capital allocation, and stakeholder engagement are decisive.

• 80% of companies show moderate to strong governance maturity, and those with high scores are more likely to be on track for Scope 1 and 2.
• CapEx and OpEx for decarbonization are expected to rise by 18% and 21% respectively by 2030.
• Use of internal carbon pricing, marginal abatement cost curves, and ring-fenced decarbonization funds are becoming common best practices.
• While 72% of companies engage suppliers and 67% engage customers, only 22% have mature supplier engagement practices, indicating that engagement gaps remain. 
• Sector-specific engagement is key (e.g., downstream focus in automotive and energy; upstream in agriculture and retail).

Product innovation and Scope 3 reduction are the next value frontier.

• Product sustainability is now a top Scope 3 investment area.
• 83% of companies report R&D into low-carbon products.
• Products with sustainability attributes show a 6–25%+ revenue uplift.
• Companies expect over one-third of their 2030 revenue to come from climate-transition-aligned products and services.
• Only 45% use robust life-cycle assessment (LCA) methods for claims, and even fewer apply cradle-to-grave analysis, leaving opportunity and credibility at risk.

With a clear shift from pledges to performance, particularly around Scope 3 emissions and value chain transformation, the report highlights that decarbonization remains core to long-term business value creation.

Invert Insights.

💡 The report is a call to action for corporate climate leaders to stay the course, double down on innovation and supply chain engagement, and treat decarbonization not just as a compliance issue but as a growth and margin imperative. Decarbonization is no longer about ambition, it’s about execution at scale. A key differentiator over the next five years will be how effectively organizations activate their value chains, govern for sustainability, and deploy capital toward climate-aligned growth.

💡A recurring challenge identified in the report is the lack of high-quality, verifiable emissions data. Over half of the organizations surveyed cite data issues as a major obstacle in progressing toward their decarbonization targets. Scope 3 emissions in particular remain difficult to track and reduce due to their dependence on upstream and downstream partners. Improvements in digital tools, standardized reporting frameworks, and closer collaboration with suppliers will be critical to closing this gap. 

💡 Four traits will define winning companies in the coming years: their ability to embed sustainability into their strategy, oversight, and incentives; their capability to tie climate action directly to CapEx/OpEx allocations and planning cycles; their capacity to engage with value chain partners to drive emissions reductions; and their proficiency to leverage Scope 3 reductions for innovation, customer retention, and pricing power. 

Read more Invert Insights.