Set Ambitious but Realistic Environmental Goals

How far from business realities can companies stretch when setting critical goals to reduce carbon emissions?

Reading Time: 20 min 


Permissions and PDF

Traci Daberko

In the years since the 2021 round of global climate negotiations, more than 2,600 companies have responded to alarms raised by scientists and policy makers by setting aggressive targets to reduce carbon emissions.1 Walmart aims to become powered by 100% renewable energy by 2035; Ikea has made a commitment to produce as much renewable energy as it consumes by 2030; General Electric aims to transform itself into a net-zero company by 2050; and American Electric Power plans to reduce its carbon emissions 80% by 2030, with a goal of net-zero emissions by 2045.2

These sustainability goals address demands from a broad array of stakeholders that companies disclose material risks and improve their environmental and social impacts. They also serve to focus the attention and resources that are required within organizations to drive social and environmental progress on the ground.

However, setting appropriately ambitious sustainability goals that can pull a steady line of progress through today’s uncertain business landscape is an exceedingly difficult task. Economic volatility, evolving stakeholder demands, scientific and technological developments, and variable sociopolitical pressures mean that the ground is constantly shifting under leaders’ feet.

Activist stakeholders in particular are watching company performance on these issues closely, demanding corporate transparency around goals and progress, and faulting companies that fail to follow through on their pledges. A 2022 study published by the nonprofit organizations NewClimate Institute and Carbon Market Watch identified 25 large corporations with net-zero commitments and rated 21 of them as having “low integrity” or worse because their plans would reduce emissions by only 40% on average, not the 100% implied by net zero.

Companies also provoke criticism for tiptoeing forward with too much hesitancy and leaping ahead too far too fast. Sustainability goals that are perceived by employees and other stakeholders as insufficiently ambitious can draw internal and public criticism and activist ire.



1.Science Based Targets,” Science Based Targets Initiative, accessed Sept. 28, 2023,

2.Sustainability Goals Database,” Embedding Project, accessed Sept. 28, 2023,; and “2022 Corporate Sustainability Report,” PDF file (Columbus, Ohio: American Electric Power, 2022),

3. P.M. Senge, “The Fifth Discipline: The Art and Practice of the Learning Organization” (New York: Doubleday, 1990).

4.Charting a Course for Decarbonizing Maritime Transport,” World Bank, April 15, 2021,

5. L.D. Ordóñez, M.E. Schweitzer, A.D. Galinsky, et al., “Goals Gone Wild: The Systematic Side Effects of Over-Prescribing Goal Setting,” Academy of Management Perspectives 23, no. 1 (February 2009): 6-16.

6.Nurturing Shared Values: Kroger Co. ESG Report 2022,” PDF file (Cincinnati: The Kroger Co., 2022),

7. N. Hakirevic Prevljak, “Maersk Secures Green Fuel Supply for 12 Methanol-Powered Boxships,” Offshore Energy, March 10, 2022,; and “Maritime Industry Leaders to Explore Ammonia as Marine Fuel in Singapore,” Maersk, March 10, 2021,

8. K. Isaacs and D. Brodwin, “How Business Coalitions Can Have a Strong Local Impact,” Harvard Business Review, April 29, 2022,


The authors are grateful for participation in our research focus groups by sustainability leaders from American Electric Power, BBVA, Biogen, Boeing, Dow, IBM, Inditex, Maersk, Novartis, Salesforce, Takeda, and Vontier.

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