Last updated: 06 Jul 2026 10:00 Posted in: Sustainability
Sunita Devi (Frencken Group Ltd, Malaysia) examines why many organisations are weakening or delaying their Net Zero commitments, despite growing climate risks and global sustainability targets. The article explores the governance, accountability and capability failures undermining credible climate action.
Sustainability and business growth are increasingly being framed as opposing priorities. For decades, many businesses operated under the assumption that competition lay between ‘planet and profits’, believing that environmental stewardship and profitability could not co-exist. Short-term economic thinking reinforced the belief that protecting the planet would come at the expense of growth, shareholder value and competitiveness.
Yet the consequences of this thinking are now becoming impossible to ignore.
Global production and consumption patterns continue to intensify pressure on natural resources, ecosystems and climate systems. Governments, companies and consumers collectively contribute to rising greenhouse gas emissions through industrial production, transport, energy use and consumption behaviours. What was once referred to as ‘global warming’ is now increasingly described by scientists and policymakers as ‘global heating’, reflecting the accelerating severity of climate-related impacts.
For long-term economic resilience, public health and environmental safety, it is imperative to reduce global heating. This transition is commonly framed as the journey towards Net Zero.
Net Zero commitments have been widely adopted by industries, governments, cities and global associations. However, many organisations appear to be quietly retreating from those ambitions, as business leaders argue that commitments are impeding company growth.
Within just a few years of announcing Net Zero strategies, some companies have reduced public communication around their targets, softened language in sustainability reports and replaced references to ‘Net Zero’ with less stringent terminology such as ‘carbon neutrality’.
The growing concern is not whether companies are announcing Net Zero commitments. The concern is whether they are prepared to honour them.
The years following the Paris Climate Agreement in 2015 saw a wave of climate commitments across the corporate and financial sectors. Financial institutions formed alliances to align financing activities with emissions reduction targets, including the UN-convened Net-Zero Banking Alliance (NZBA), established in 2021.
Yet momentum has weakened in several areas. Some banks and financial institutions have faced political, legal and commercial pressures that complicated the implementation of Net Zero-aligned financing strategies. Similar delays have emerged elsewhere.
In 2025, the European Union approved measures under its so-called ‘Stop-the-Clock’ directive, delaying aspects of sustainability reporting implementation timelines for certain companies. The Corporate Sustainability Due Diligence Directive (CSDDD) was also postponed for some entities.
These developments were interpreted by critics as signs that economic and political pressures were overtaking climate urgency. Initial compliance is now expected for large companies in 2028.
Singapore provides another example of the challenges surrounding implementation and transparency. The country introduced a carbon tax in 2019 under the Carbon Pricing Act, applying to facilities producing more than 25,000 tonnes of greenhouse gas emissions annually. The framework is operational and forms part of Singapore’s broader Net Zero strategy and Green Plan 2030, alongside its longer-term Net Zero ambitions for 2050. However, limited facility-level public disclosure means there is relatively little visibility regarding the extent of carbon tax payments and their measurable impact on emissions reductions across major emitters.
Progress towards the United Nations 17 Sustainable Development Goals has also slowed considerably, despite the UN’s ‘Decade of Action’ initiative launched in 2020.
At the business level, concerns over credibility are increasing. The Science Based Targets initiative (SBTi), widely regarded as one of the leading frameworks for validating corporate climate targets, removed 239 companies from its commitments list in 2024 after they failed to meet required target-setting deadlines. Companies affected reportedly included large multinational firms such as Microsoft, Walmart and Unilever.
Meanwhile, an Accenture report published in 2022 warned that 93% of companies with Net Zero commitments would fail to meet their goals unless they at least doubled the pace of emissions reductions by 2030.
These developments raise a difficult question: are many Net Zero commitments genuine transition plans, or have they become reputational instruments vulnerable to economic pressure?
The global sustainability conversation is not new. World leaders were warned about environmental degradation in the Brundtland Commission’s 1987 report, Our Common Future, which highlighted the growing social and economic consequences of environmental pollution and unsustainable development. In 2015, collective global governance was demonstrated again through the Paris Climate Agreement, where countries committed to limiting global temperature rise and accelerating emissions reduction efforts.
To support this transition, financing structures were reshaped through sustainable finance initiatives at global, regional and national levels, with capital increasingly directed towards resilience and low-carbon development.
Yet in 2025, in Belém, Brazil, during discussions leading towards COP30, world leaders were still speaking about transformation pathways while concrete implementation milestones towards Net Zero remained uneven and delayed.
How many more years will it take for commitments to translate into measurable action? Global heating and extreme weather events are happening here and now, affecting economies, businesses and communities across the world.
We are all part of the population of this planet, and we are responsible for the roles that we play upon it. The link between consumption, production and emissions is causal.
Consumption creates demand. Demand is met through the production of goods and services by companies. Those products and services generate emissions across Scope 1, Scope 2 and Scope 3 when they are produced, transported and consumed. This in turn contributes to the depletion of natural resources and environmental degradation, which should be addressed through stronger governance and regulatory oversight.
The goal of Net Zero is to reduce emissions collectively, thereby reducing the risk of more extreme climate conditions. One oil and gas company cannot set a Net Zero target and bring down the fever of the planet alone. Carbon majors need to work together.
For example, BP and Chevron are among the major fossil fuel producers identified in the Carbon Majors database, which links 32 companies to more than half of global fossil fuel and cement CO2 emissions. BP has also scaled back parts of its clean energy strategy, increasing its focus on oil and gas investment.
This is the uncomfortable reality: when profit and environmental responsibility compete, profit often wins. That is not simply a corporate failure. It is also a governance failure.
When businesses announce Net Zero commitments, public declarations can strengthen corporate reputation, improve stakeholder confidence and support investor sentiment. However, the greater concern is whether those commitments are supported by transparent emissions baselines, measurable reduction pathways and independently validated targets.
When companies commit to Net Zero, total greenhouse gas inventories across Scope 1, Scope 2 and Scope 3 should ideally be disclosed together with baseline years, reduction targets and implementation timelines. Without a transparent starting point, stakeholders may struggle to assess whether reported reductions are material, comparable or aligned with long-term commitments.
This is where independent validation becomes increasingly important. The SBTi validation process is designed to assess whether corporate decarbonisation pathways align with climate science and recognised emissions reduction methodologies.
Yet many companies continue to describe themselves as ‘aligned with SBTi’ without obtaining formal SBTi validation. In some sustainability reports, emissions reductions, avoided emissions or carbon removals may be disclosed without clearly identifying baseline inventories or percentage reductions achieved against stated targets. This creates challenges around reporting accuracy, comparability and accountability.
Stakeholders cannot accurately assess whether emissions reductions are material, temporary or aligned with long-term targets.
This raises important governance questions:
The credibility of sustainability reporting increasingly depends not on ambitious announcements, but on measurable evidence, governance oversight and transparent reporting methodologies.
The SBTi has reported that nearly 30% of companies have had their commitments removed after failing to progress towards required target-setting milestones. This raises an important question: why are some companies announcing Net Zero ambitions before establishing sufficiently robust emissions management and transition plans?
One of the most common weaknesses is the absence of a comprehensive Net Zero governance framework from the outset. A credible Net Zero strategy requires more than a public declaration. Companies should establish formal Net Zero policies supported by clearly defined governance structures, emissions baselines, reduction pathways, implementation timelines and annual review mechanisms. Policies should remain dynamic and evolve alongside operational, regulatory and technological developments.
Another major challenge is organisational capability. Many companies still lack the internal resources and technical competencies required to manage long-term decarbonisation programmes effectively. In some organisations, responsibility for Net Zero implementation is concentrated within small sustainability teams or outsourced largely to third-party consultants. While external advisers can provide valuable support, long-term transition planning ultimately requires strong internal capability and cross-functional coordination.
Net Zero implementation affects multiple operational areas simultaneously, including energy management, engineering, fuel and gas operations, renewables and technology, product lifecycle management, procurement and supply chains, logistics, waste and circularity, corporate finance, treasury, risk management, reporting and analytics. Managing emissions across Scope 1, Scope 2 and Scope 3 categories involves complex operational processes requiring sector-specific expertise and reliable data systems.
Without sufficient investment in competencies, technology and governance oversight, companies may struggle to deliver meaningful emissions reductions despite ambitious public commitments.
If a company sets a Net Zero strategy, the board must remain accountable while management remains responsible for implementation. Yet many organisations continue to face challenges including inadequate staffing, limited technical competencies, unclear transition pathways and delayed milestones. These weaknesses ultimately affect governance credibility and slow meaningful emissions reduction.
Malaysia’s Net Zero roadmap itself acknowledges that economic, policy and technical barriers may delay implementation. This reflects a broader global issue: climate ambition often advances faster than political and operational execution.
Frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD) have already identified transition risks linked to policy, legal exposure, technology, markets and corporate reputation. Increasingly, Net Zero performance is becoming a measure of governance quality and long-term business resilience.
Global heating is no longer a distant concern. The decisions made today will determine whether future generations inherit a stable and liveable planet. For accountants, auditors and governance professionals, the credibility of Net Zero reporting may become one of the defining corporate accountability challenges of the next decade.
Author bio
Sunita Devi
Senior Sustainability Manager
Frencken Group Limited
"How many more years will it take for commitments to translate into measurable action? Global heating and extreme weather events are happening here and now, affecting economies, businesses and communities across the world."
Sunita Devi, Senior Sustainability Manager, Frencken Group Limited