PwC's third annual State of Decarbonization report has found that 82 per cent of disclosing companies held steady or accelerated their climate targets in 2025, with more companies increasing their ambitions than reducing them, even as policy reversals and capital constraints reshaped the operating environment. The report, released on 28 April 2026, draws on AI enabled analysis of millions of data points across thousands of corporate disclosures and concludes that corporate decarbonisation has entered a new phase defined by financial discipline rather than retreat. The findings matter because they push back against the prevailing narrative that the pullback in federal clean energy support and challenges to disclosure regulations have caused corporate sustainability to lose momentum.

 

The Headline Numbers Behind the Resilience

 

The data underlying the report's central conclusion is unambiguous. Eight in ten companies, or 82 per cent, kept their climate commitments steady or accelerated the timelines for achieving them. More companies increased their ambitions, at 23 per cent, than decreased them at 18 per cent. Progress also held, with more organisations reportedly on track to meet their targets than in prior years. The number of companies announcing new decarbonisation targets grew 7 per cent in 2025, stabilising after gains of 29 per cent in 2024 and 45 per cent in 2023, which reflects the natural slowdown that occurs as the population of large public companies without targets shrinks.

PwC stresses that these findings should not be read as evidence that the world is on track to meet its climate goals. Rather, they indicate that corporate decarbonisation among disclosing companies has proven more durable than many observers expected, even as some of the political and financial conditions that supported earlier progress have weakened. The 18 per cent of companies that reduced their ambitions did so against a backdrop of higher costs, tighter capital and policy uncertainty, and PwC notes that not every pullback represents retreat. Some reflect organisations recalibrating with better data, tighter governance and more realistic execution plans, which can produce commitments that are more credible and deliverable than the headline grabbing promises that characterised earlier corporate sustainability cycles.

 

The Five Strategic Observations Shaping Corporate Decarbonisation

 

The report identifies five strategic observations that define the current phase of corporate decarbonisation. The first is the shift from ambition to disciplined execution. The second is the pursuit of energy resilience through sharper capital allocation. The third is supply chain de risking. The fourth is the integration of decarbonisation into product design. The fifth is the use of artificial intelligence to translate sustainability data into emissions impact. Each of these observations reflects a maturing of how companies approach sustainability, with greater emphasis on the financial logic of investments and on integration with core business decisions.

The underlying organising principle across the five observations is that companies are now pressure testing every sustainability move against resilience, risk exposure, growth and profitability. The harder edged question being asked at executive level is whether sustainability can improve business economics, and the report concludes that the evidence supports an affirmative answer. This shift positions sustainability as a strategic lever comparable to other operating decisions rather than as a separate corporate function.

 

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Where Progress Is Holding and Where It Remains Difficult

 

Progress varies significantly across emissions scopes. On Scope 1 emissions, which cover direct operational emissions from sources owned or controlled by a company, only 46 per cent of companies are on track, unchanged from the prior year. Scope 1 reductions are capital intensive and operationally complex, requiring asset level analysis of fuel and refrigerant sources alongside clear pathways to electrification or alternative fuels. Leading companies are addressing this by tying decarbonisation directly to asset replacement cycles, using natural reinvestment points to reduce fuel demand and associated emissions.

On Scope 2 emissions, which cover indirect emissions from purchased electricity, companies have continued to make progress through increasingly detailed implementation plans, on site renewable energy investment and renewable energy procurement contracts. PwC warns that Scope 2 decarbonisation may become more challenging in the future as hyperscale data centre energy demand for AI continues to expand, while United States clean energy production and investment tax credits have been eliminated and large scale wind project pipelines have stalled. On Scope 3 emissions, which dominate most companies' total footprint, 56 per cent of companies are on track against the pathways they have set, reflecting the difficulty of influencing emissions outside direct operational control.

 

Energy Resilience as a Board Level Priority

 

The report identifies 2025 as the year that energy resilience became a widespread board level concern. Rolling blackouts, electricity rate spikes and supply chain risk drove the issue from technical operations into core strategic decision making. Total contracted power purchase agreement volumes in the United States and Europe fell 19 per cent in 2025, and deal counts dropped 26 per cent, although there has been an uptick in early 2026 driven almost entirely by data centre developers matching new AI driven demand.

Leading companies are responding by reducing exposure through smart capital allocation that lowers energy use, engineering reliability where it matters most, electrifying methodically with a clear business case, building diversified and risk aware energy portfolios and managing energy strategically as a board level priority. The report notes that capital expenditure aligned with the climate transition was slightly lower in 2025 than in prior years, yet more companies made progress against their targets, which suggests that organisations are becoming more selective about where to invest in decarbonisation rather than reducing their commitment to it. In hard to abate sectors including metals and mining, oil and gas, and construction and real estate, transition aligned capital expenditure remains higher and companies that allocate larger shares of capital to transition aligned activities are commanding stronger valuations from investors.

 

Supply Chain Visibility as a Strategic Capability

 

The report identifies supply chain visibility as one of the largest gaps in corporate decarbonisation capability. In a cross sector sample of 158 Fortune 500 companies, 25 per cent lacked visibility beyond tier 1 suppliers, while 58 per cent reported partial tier 2 visibility and only 18 per cent consistently tracked supplier activities and emissions beyond tier 1. This visibility gap creates a structural disconnect between effort and impact, because companies act on what they can see and measure while many of their highest impact emissions sources sit outside their line of sight.

Leading companies are addressing this gap by mapping beyond their first tier of suppliers, establishing accountability for supplier data quality and decarbonisation progress, enabling and incentivising suppliers to participate in the transition, and focusing effort where the impact is greatest. As geopolitical disruption, shifting tariffs, energy market volatility and climate driven raw material shortages increase uncertainty across global supply chains, the case for stronger supplier visibility is becoming both an emissions argument and a commercial resilience argument.

 

Designing Decarbonisation Into Products

 

The report makes a strong case for product design as one of the most powerful levers for emissions reduction. Design decisions, including material selection and product functionality, can determine up to 80 per cent of a product's life cycle environmental impact. The commercial case is increasingly compelling, with studies cited in the report showing that products with differentiated sustainability attributes are achieving a 6 to 25 per cent revenue uplift depending on sector and product type.

The connection between product sustainability and decarbonisation performance is already visible in the data. Among Fortune 500 companies studied, approximately 31 per cent of those on track with their Scope 3 targets demonstrate scaled adoption of product sustainability practices, compared with 19 per cent of those off track and 14 per cent of those without Scope 3 targets. In consumer goods and retail, companies that are advanced in integrating sustainability into product design are realising 8 to 13 per cent higher profitability than less mature peers and trade at higher valuation multiples. Leading product decarbonisation companies are moving sustainability out of silos, designing it directly into products, building supply chain transparency, investing in data quality and developing the commercial capabilities required to monetise sustainable products.

 

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The State of AI in Decarbonisation

 

The use of AI for operational decarbonisation has reached 60 per cent of companies, yet only one in five companies strategically use next generation AI for decarbonisation purposes and fewer than 1 per cent have quantified emissions reductions from their AI initiatives. The report identifies the most immediate opportunity as the use of AI to address sustainability data challenges, including fragmented emissions data, manual reporting processes and limited visibility beyond company operations. Despite data quality being the largest constraint on progress, only about 14 per cent of companies publicly report using AI to improve sustainability or emissions reporting as of August 2025.

In the sectors where AI is delivering the most decarbonisation value, companies have direct operational control combined with rich real time data streams. Utilities and electrical equipment companies are deploying AI for grid performance, renewable generation forecasting and demand management. Industrial manufacturers are using AI in smart factories to reduce energy use and improve process efficiency. Transportation and logistics companies are applying AI to routing and fleet utilisation. Technology companies are using AI to manage data centre energy. Leaders across these sectors focus on operational impact first, embed sustainability into AI systems at the design stage, measure emissions outcomes and use AI to solve data challenges.

 

What the Report Signals for the Decarbonisation Landscape

 

The wider message of the report is that sustainability is being reframed in explicitly financial terms. Sharper capital allocation is driving better outcomes. Energy is becoming a board level strategic priority. Supply chains are emerging as a competitive unlock. Product sustainability is becoming a growth engine. AI is showing significant promise as an enabler of decarbonisation. The companies that are succeeding are those that build strategies capable of performing across multiple scenarios rather than relying on a single optimistic forecast.

For investors, regulators and corporate strategists, the report provides one of the most comprehensive recent snapshots of how corporate decarbonisation is actually progressing rather than how it is being publicly described. The combination of held or accelerated commitments, more rigorous target setting, increasingly disciplined capital allocation and selective adoption of new tools such as AI suggests that corporate sustainability has matured into a structural feature of large company strategy. The next phase of progress will depend on whether companies continue to apply the same financial and strategic discipline they are demonstrating now to the much harder work of Scope 3 reductions, supply chain transparency and the engineering challenges of decarbonising hard to abate sectors.

 

Source: PwC