PwC Survey Finds Decarbonization Efforts Holding Firm Despite a Year of Turbulence

Key Takeaways

• Commitments Remain Durable: 82% of companies held or accelerated decarbonization timelines, with more increasing ambitions than decreasing them
• Shift Toward Financial Discipline: Companies are treating sustainability as a core business lever, prioritizing profitability, resilience, and risk-adjusted returns
• Execution Improving: Fewer new targets but higher-quality, science-based commitments with stronger progress on Scope 1 and 2 emissions
• Supply Chain Visibility Gaps Persist: Only 18% consistently track emissions beyond tier 1 suppliers, leaving Scope 3 exposure
• AI Opportunity Largely Untapped: While 60% are using AI for decarbonization, less than 1% report measurable results

Deep Dive

Corporate decarbonization efforts are proving more resilient than recent headlines might suggest, according to PwC’s third annual State of Decarbonization report, released yesterday.

The findings come after a year marked by policy reversals, funding cuts, and growing scrutiny of sustainability programs. Federal support that had helped drive clean energy investment was reduced or eliminated in some cases, while companies faced pressure to justify both the impact and optics of long-standing sustainability initiatives. At the same time, legal challenges to disclosure regulations added further uncertainty, even as risks tied to extreme weather, geopolitical instability, and supply chain disruption continued to intensify.

Despite that background, the report finds that most companies did not scale back their decarbonization efforts.

PwC’s analysis, based on AI-enabled insights drawn from millions of data points across thousands of corporate disclosures and related documents, shows that 82 percent of companies either maintained or accelerated their decarbonization timelines. More companies increased their ambitions than reduced them, and overall progress held steady, with a larger share of organizations on track to meet targets compared to prior years.

The report notes that this does not indicate global climate goals are within reach. It does, however, suggest that corporate decarbonization efforts among disclosing companies are more durable than expected.

What is changing is how companies are approaching those efforts.

PwC identifies a shift toward more disciplined execution, with organizations placing greater emphasis on financial performance, resilience, and risk exposure. Rather than expanding commitments broadly, companies are increasingly treating sustainability as a strategic lever, evaluating investments against growth and profitability.

That shift is reflected in target-setting. While new commitments increased by 7%, the report points to stronger emphasis on science-based targets and improved execution. More companies are now on track to meet Scope 1 and Scope 2 emissions goals than in previous years.

Companies are also adjusting how they allocate capital. In response to energy price volatility, geopolitical shocks, and the phase-out of certain clean energy incentives, organizations are spending less on decarbonization overall while focusing on higher-return initiatives. Much of that effort is centered on reducing energy demand and improving efficiency rather than expanding supply. In some hard-to-abate sectors, companies allocating a greater share of capital to climate transition-aligned activities are seeing stronger valuation premiums.

The report also highlights ongoing challenges in supply chain visibility. Only 18% of companies report consistently tracking supplier activities and emissions beyond tier one, limiting their ability to address Scope 3 emissions. Companies that are making progress in this area are focusing on mapping supply networks, prioritizing high-impact suppliers, and introducing incentives and accountability mechanisms.

Product design is also emerging as a key factor in decarbonization performance. Companies that are on track with Scope 3 targets are more likely to have integrated sustainability practices across the product lifecycle. According to the report, 31%of companies on track demonstrate strong adoption of product sustainability practices, compared to 19% of those that are off track. Products with sustainability attributes are also associated with revenue increases ranging from 6% to more than 25%.

The report also points to a gap between adoption and impact when it comes to artificial intelligence. While 60% of companies report using AI to support decarbonization, fewer than 1% have achieved measurable results. PwC suggests that companies that more directly integrate sustainability into AI systems may be better positioned to identify and capture emissions reduction opportunities at scale.

Altogether, the findings suggest that while external pressures have reshaped the operating environment, they have not reversed corporate decarbonization efforts. Instead, companies appear to be shifting toward a more measured and financially grounded approach, one that prioritizes execution, efficiency, and tangible outcomes.

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