More than nine in ten companies with a climate target reported overall positive business impacts, according to a new global survey by the Science Based Targets initiative, or SBTi.
The findings, based on responses from 171 firms with validated goals for at least two years, indicate that setting a climate target not only accelerates emissions cuts but also enhances reputation, investor confidence, strategic cohesion and long-term financial resilience.
Nearly all surveyed companies said their reputation improved after setting a climate target, while eight in 10 reported stronger investor relations and confidence.
Strategic benefits were also widespread, with most firms saying their targets improved long-term vision and supply chain alignment. Seven in ten cited greater resilience to future regulation.
“The evidence shows that setting a climate target makes strong business sense,” said David Kennedy, CEO, SBTi, in the report. “It helps companies manage transition risks, unlock new opportunities and remain competitive in a carbon-constrained world.”
Emissions Down, Business Up
Ninety percent of respondents said setting a climate target raised their ambition, and 86 percent reported faster decarbonization.
Studies cited in the report confirm that companies with validated climate targets reduced their direct emissions more quickly than peers and achieved nearly 9 percent greater reductions in emissions intensity.
Companies with net-zero targets reported even stronger results, with 96 percent saying the overall impact was positive.
The SBTi, which now works with 11,000 companies in 86 countries representing 40 percent of global market capitalization, said the findings show that climate action has evolved from compliance to a strategic advantage.
Financial Performance and Market Perception
Although some companies reported higher short-term operational costs, with 31 percent seeing an increase, 92 percent said the long-term financial impact was neutral or positive.
Three in four companies said target setting improved investor confidence. Research by the European Central Bank found that banks offered up to 16 basis points lower interest rates to firms with emissions-reduction goals than to those without.
Other studies link climate target setting to lower stock volatility and stronger protection during market downturns. U.S. firms with validated targets recorded smaller losses during the 2020 crash.
“Validated targets signal preparedness for regulation and transition risks, which markets increasingly value,” Kennedy said.
Reputation and Competitive Positioning
The reputational benefits of adopting a climate target are particularly striking. Ninety-five percent of companies said their credibility with stakeholders improved, and three in four noted higher standing within their industries.
Nearly seven in ten said their brand trust strengthened, while two-thirds reported better consumer perception.
Companies also saw commercial gains. Sixty-seven percent reported improved competitiveness compared with peers, and 74 percent said stronger alignment with customer expectations had enhanced their market position.
The report said climate leadership is increasingly becoming a differentiator in procurement and supply chain contracts.
“Companies that act now are not only reducing risk but also gaining strategic advantage,” Kennedy said. “This is what a credible climate target approach delivers — measurable progress, market confidence and resilience.”
Evidence Beyond the Survey
The SBTi’s review of 22 academic and market studies supported the survey’s conclusions. Research showed that companies with validated climate targets cut emissions faster, maintained steady profits and often achieved higher returns.
One study found that target adopters invested about 60 to 64 percent more in climate initiatives initially but achieved long-term savings of 22 to 33 percent in operating costs and 17 to 19 percent in emissions.
Other studies found no adverse effects on profitability or gross margins even as firms reduced emissions. “Decarbonization is increasingly being recognized as good for business, not a cost to it,” Kennedy said.
Case Studies Highlight Practical Impact
Case studies in the report illustrate how climate target setting drives transformation. PAI Partners, a private equity firm managing a portfolio of 40 companies with combined sales of 40 billion euros, said its targets improved investor trust and procurement outcomes.
Heineken credited its 2021 climate target with aligning operations and suppliers, achieving a 34 percent cut in direct emissions by 2024.
Indian renewables company ReNew said its validated net-zero target boosted investor confidence and encouraged suppliers covering more than 90 percent of its value chain emissions to act.
The Broader Trend
Globally, companies setting a climate target nearly doubled between 2023 and mid-2025, with those adopting both near-term and net-zero goals rising by 227 percent. Together, they now represent one quarter of global revenue.
As regulations tighten and climate risks grow, Kennedy said companies that delay action risk losing competitiveness. “For businesses that have not yet set validated targets, the message is clear,” he said. “Climate target setting is no longer optional—it is essential for long-term success.”
The report concluded that while more research is needed, particularly on supply chain emissions, existing evidence shows that a climate target delivers both environmental and business value. Companies with validated goals demonstrate measurable emissions cuts, greater financial stability and stronger investor trust.
“The evidence is increasingly clear: decarbonization delivers real business value,” Kennedy said. “Climate target setting turns ambition into action and action into advantage.”
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