A few years ago, announcing a net-zero commitment was enough to position a company as a sustainability leader. Executives stood on stage, made bold declarations, and the world applauded. It was a time of optimism when it seemed like the private sector was taking meaningful action on climate change.
Now, reality is setting in. Making a commitment is easy, delivering results is far more complex. Companies are discovering that achieving net-zero requires not just ambition but a deep transformation of their operations, supply chains, and even business models. And that’s where the real challenge begins.
One of the biggest barriers is measurement. The old saying is true: “You can’t manage what you don’t measure.” Yet, for many companies, simply understanding their full carbon footprint is a struggle. Scope 1 and 2 emissions (direct operations and purchased energy) are relatively easy to track. The real challenge is Scope 3 emissions, which come from suppliers, logistics, product use, and even disposal. These emissions often account for the majority of a company’s footprint but measuring them is complicated. Data is scattered, suppliers may lack transparency, and in many cases, there is no standardized way to track emissions consistently.
Take AstraZeneca as an example. More than 95% of its emissions fell into Scope 3, which meant the company had to go beyond internal reductions and engage suppliers, requiring them to measure and report their own emissions. This is a step that many companies are still struggling to take. Without reliable data, any net-zero targets’ risks becoming an empty promise rather than a strategic business goal.
Regulation is adding another layer of complexity. The days of voluntary sustainability commitments are fading. Governments and investors are demanding more accountability, and new regulations, such as the EU’s Corporate Sustainability Reporting Directive (CSRD) and the SEC’s climate disclosure rules, require companies to be far more transparent. There are also legal risks. The case of Milieudefensie v. Shell in the Netherlands sent a strong message: companies that do not align their business strategies with climate goals may face lawsuits and legal pressure to cut emissions faster.
Financial challenges also play a role. Many companies recognize the need to transition, but the cost of shifting to renewable energy, decarbonizing supply chains, and adopting low-carbon technologies can be significant. For businesses with tight margins, these investments are difficult to prioritize, especially when they do not deliver immediate financial returns. At the same time, the risk of greenwashing (making sustainability claims without real substance) is increasing. Investors, consumers and regulators are becoming more skeptical of net-zero pledges that lack transparency and credible action plans.
So, what does this mean for companies serious about reaching net-zero? The key lesson is that sustainability cannot be treated as a separate initiative; it must be fully integrated into corporate strategy. Companies making the most progress are those embedding climate action into decision-making, collaborating closely with suppliers, and using data-driven approaches to track their emissions. Transparency is essential. The time for vague commitments is over, stakeholders expect concrete roadmaps, measurable progress, and real impact.
Achieving net-zero is a challenge, but it’s also an opportunity. Businesses that take climate action seriously will gain competitive advantages in efficiency, innovation, and resilience. Those that do not will face more than just climate risks, they will face credibility risks in an economy that is quickly demanding real sustainability leadership.