The trillion-dollar question behind corporate net-zero pledges

Corporate climate spending now steers trillions of dollars in transition finance worldwide. Does it drive genuine climate action? Research shows that accounting flexibility alone can make a company’s reported emissions vary by roughly a factor of two – enough to appear either as a climate leader or a laggard. A new Perspective in Nature Sustainability proposes developing industry-specific net-zero blueprints to close that gap.

More than 2,000 companies representing US$36.6 trillion in annual revenue have committed to net zero, and corporations are estimated to hold 18-21 GtCO₂e in annual mitigation potential. Yet, according to the latest Net Zero Stocktake, only 7% of corporate net-zero pledges demonstrate genuine integrity. The challenge is no longer persuading companies to set net-zero targets. It is ensuring that corporate net-zero pledges rest on a common scientific foundation.

Researchers from the European School of Management and Technology (ESMT) Berlin, the International Institute for Applied Systems Analysis (IIASA), Bauhaus Earth, and the University of Sussex propose a scientific roadmap for developing industry-specific net-zero blueprints. Unlike existing standards, which specify what companies should disclose, these blueprints define the scientific basis needed to make net-zero claims comparable within an industry. Each blueprint would cover four elements: consistent emissions accounting, industry-calibrated target setting, progress tracking, and governance of residual emissions. Together, they would provide a common scientific foundation for Corporate Value Chain (Scope 3) measurement under the GHG Protocol, voluntary commitments under the Science Based Targets initiative (SBTi), and regulatory disclosure under the Corporate Sustainability Reporting Directive (CSRD) and International Sustainability Standards Board (ISSB).

“Beyond sectoral pathways, current Scope 3 guidance advises companies to decarbonize what they can and neutralize what’s left over, without quantifying them. This pushes collective over-reliance on a contested carbon credit market and on removal capacity that has planetary limits. Industry-specific blueprints would close that gap. They convert planetary science into the real economy: benchmarking corporate ambition that fosters innovation, a shared scientific foundation for investors, and targeted policy support for regulators,” says lead author Ramana Gudipudi, from ESMT Berlin.

The paper arrives at a time when geopolitical and economic pressures are weakening climate policy. The United States withdrew from the Paris Agreement in early 2026, while the EU’s Omnibus package significantly reduced the scope of the CSRD. Without stronger scientific guidance, these changes risk misdirecting investment and weakening confidence in corporate climate action.

From global pathways to company-level action

Climate science rarely translates directly into company-level decision making. Global pathways inform governments, governments shape policy, and policy influences corporate standards. Industry-specific net-zero blueprints aim to bridge this final gap by translating sectoral pathways into industry-specific guidance. Because companies within the same industry typically share similar value chains, mapping those value chains onto sectoral pathways can quantify the decarbonization ambition required. Such an approach reveals what is realistically achievable, what remains as residual emissions, and how companies can compare progress using a common scientific basis. For the food and beverage industry, such a blueprint would map emissions from farming, packaging, transport, and refrigeration against relevant sectoral pathways. This would identify where emissions can be realistically reduced, distinguish unavoidable residual emissions such as livestock methane, and provide a common basis for setting targets and measuring progress across companies.

Why industry needs it

Following the political backlash against climate policy, corporate sustainability risks becoming either a compliance exercise or something pursued only where there’s a clear path to return on investment. What companies still don’t know is the cost of inaction, and how that compares to the cost of reaching net-zero. The challenge differs by industry. For example, construction firms must address emissions embedded in cement, steel, and glass; AI infrastructure faces rising electricity demand and mineral competition; financial institutions need robust ways to evaluate transition plans across lending portfolios. Industry-specific blueprints would let each company price its decarbonization levers – the premium credible climate leadership can command – and the cost of inaction if that risk goes unaddressed.

“For decades, the role of climate science was to inform governments, who would then set the rules for industry. That model is now under severe strain. At Bauhaus Earth, we see every day how urgently the built environment sector needs exactly this kind of scientific infrastructure. Our own research shows construction drives one-third of global emissions and is on track to more than double its footprint by 2050. Industry-specific blueprints, grounded in physics and aligned with planetary boundaries, are a scientific and practical necessity,” says retired professor Jürgen Kropp, guest senior research fellow at IIASA and partner of Bauhaus Earth.

“AI and data centers are becoming a crucial driver of CO₂ emissions. Internationally consistent guidelines for carbon neutral AI will provide investors with urgently needed planning security and make AI tools more acceptable to increasingly distrustful users,” adds Felix Creutzig, study coauthor and Bennett Chair for Innovation and Policy Acceleration at the University of Sussex.

A call to action

This paper arrives at a time of growing momentum around corporate climate governance. The GHG Protocol is undertaking its first major Scope 3 revision, SBTi has published Corporate Net-Zero Standard v2.0, and ISO/DIS 14060 is open for public consultation. On 3 July 2026, the European Commission adopted its revised European Sustainability Reporting Standards (ESRS), while more than 25 countries have now adopted the ISSB’s global disclosure standards. The proposed blueprints would give this converging landscape a common scientific foundation. The authors argue these blueprints should become a living scientific resource, updated as climate science, technology, and industries evolve, analogous to the IPCC’s role in periodically assessing climate science. They call on researchers, corporations, standard-setters, policymakers, and funding organizations to help build it.

Publication:
Gudipudi R., Costa L., Arumugam P., Agarwala M., Creutzig F., & Kropp J.P. (2026). From corporate net-zero pledges to credible climate action. Nature Sustainability DOI: 10.1038/s41893-026-01908-6 

Related publication cited by Prof. Kropp:
Li, C., Pradhan, P., Chen, G., Kropp, J., & Schellnhuber, H.J. (2025). Carbon footprint of the construction sector is projected to double by 2050 globally. Communications Earth & Environment. DOI: 

Press images available for download here 

About IIASA:

The International Institute for Applied Systems Analysis (IIASA) is an international scientific institute that conducts research into the critical issues of global environmental, economic, technological, and social change that we face in the twenty-first century. Our findings provide valuable options to policymakers to shape the future of our changing world. IIASA is independent and funded by prestigious research funding agencies in Africa, the Americas, Asia, and Europe. www.iiasa.ac.at
 

About Bauhaus Earth:

Bauhaus Earth is an international Think-and-Make-Tank, based in Berlin. The non-profit organisation is dedicated to the regenerative transformation of the built environment. Founded in 2019 by climate scientist Hans Joachim Schellnhuber, today, Bauhaus Earth brings together ca. 50 experts from the fields of science, architecture and planning, governance, industry, and crafts. www.bauhauserde.org