The vast majority of public companies are either retaining or ramping up their climate commitments, with companies found to be more than twice as likely to be increasing their emissions reduction goals than decelerating them, according to a new study released by professional services firm PwC, based on data from climate research provider and environmental disclosure platform CDP.

The study also found that the practice of setting climate goals is progressing down the value chain as companies increase engagement efforts, with smaller companies representing a growing proportion of those introducing new targets.

For the report, PwC’s 2025 State of Decarbonization, PwC examined data from 4,163 public companies that submitted the full CDP questionnaire in the 2024 disclosure cycle, using GenAI to analyze more than 1 million entries of long form free text and quantitative responses, in addition to drawing on information from S&P Capital IQ, the Science-Based Targets initiative, and various public sources of information.

The report found that, while headlines suggest that companies are scaling back their sustainability efforts, 47% of companies maintained their decarbonization targets in 2024, and 37% actually increased their ambitions, while only 16% pulled back on their climate goals.

Even among those scaling back, PwC found that more than half are recalibrating their expectations lower from overly ambitious goals set in the absence of a detailed plan, as companies gain a better view of what it achievable.

According to the report, the number of companies setting new Scope 1 and 2 emissions reduction targets has grown for each of the past seven years, including growing by 14% in 2024 to 1,293 companies from 1,132 in 2023, and up from less than 500 companies in 2020. Notably, however, the total emissions covered by the new targets declined in 2024 to around 1.1 billion metric tons of CO2e from more than 2 billion tons in the prior year. PwC attributed the change to a major shift in smaller companies setting climate goals, with the average revenue for a company introducing new goals in 2024 declining to $1.3 billion from $3.8 billion in 2020.

The increase in participation by smaller companies in setting climate commitments comes as companies appear to be ramping engagement in order to tackle their Scope 3 value chain emissions, with 72% of companies reporting that they are now engaging with their suppliers, and 67% engaging with customers and clients.

The value chain focus was also apparent in disclosure data, with more than 3,600 companies reporting Scope 3 emissions in 2024, up by 80% from around 2,000 in the prior year.

Despite the increased focus on engagement and reporting, the report found that only 54% of companies were on track to meet their Scope 3 emissions goals. Notably, however, this metric improved from 50% in 2023.

The report found a better success rate on operational and energy emissions, with 67% of companies on track to meet their Scope 1 and 2 targets. Progress appears to be much faster on Scope 2, with on-track companies reporting an aggregate reduction of 12%, compared to a 6% reduction in Scope 1 emissions.

According to PwC, the faster progress on Scope 2 emissions highlights the centrality of low-carbon electricity to current emissions reduction efforts, with a shift to renewable energy accounting for more than 40% of Scope 1 and 2 emissions reductions last year, indicating a need to focus in the future on direct Scope 1 emissions in the future to maintain momentum.

As companies increasingly set decarbonization commitments, the report also found that they anticipate spending more on climate initiatives, with expectations for an 18% higher proportion of capex and 21% higher proportion of operating expenses to be allocated to climate mitigation and adaptation by 2030.

The higher spending expectations come as companies also see opportunities to add value through their climate efforts, with 60% of companies already having low-carbon products in their portfolio, and PwC’s analysis finding a potential uplift of 6% to 25% from products featuring sustainability attributes. PwC also highlighted potential value to be derived from progress on Scope 3 emissions, with less energy and materials needed to produce products translating to lower costs and improved margins.

Click here to access the report.