Corporate America is struggling to meet its climate goals as sustainability initiatives lose out on funding to competing priorities such as artificial intelligence (AI), cybersecurity and digital transformation.
More than half of the executives surveyed by the Conference Board and data analytics firm ESGAUGE said those investments now rank ahead of decarbonisation initiatives. The result is that many companies are falling behind on their emissions targets.
About 58% of S&P 500 companies that have set goals to reduce their direct, or Scope 1, emissions have reported flat or rising emissions since 2021, according to the report. The figure climbs to 62% for Scope 3 emissions, which are generated by suppliers and customers and often account for the largest share of a company’s carbon footprint.
Looking ahead, only one-quarter of sustainability leaders surveyed said they’re confident their companies will meet environmental goals across most emissions categories.
"It wasn’t political pressure that came out as the top reason to potentially delay or adjust a target,” said Andrew Jones, principal researcher at the Conference Board and the report’s author, referring to the Trump administration’s opposition to green policies. "It was capital allocation. Ultimately, that’s emerging as the real pressure point.”
The strain is notable in the technology sector where companies are racing to scale AI infrastructure to meet surging demand. The greenhouse gas emissions of Amazon.com Inc, Alphabet Inc’s Google and Microsoft Corp spiked in 2025. Microsoft reported the biggest gain with emissions climbing 25%.
"Climate targets are being increasingly tested,” Jones said. "Targets that don’t have a clear source of funding and aren’t clearly integrated into business planning will become hard to defend in the years to come if they’re not already.”
And it’s more than just the tech industry that’s being affected. In May, Burberry Group Plc, the British retailer known for its tartan scarves and garbardine trenchcoats, postponed its goal of cutting emissions to net zero by a decade to 2050. Brazil’s JBS NV, the world’s largest meatpacker, said earlier this month that it’s dropping its Scope 3 target, which includes the emissions produced by all of the livestock that the company slaughters.
"We are going to see more companies revise their targets in the next year,” Jones said. "Many emissions targets are just not on track.” Instead, "we’ll see more realistic, more pragmatic targets.”
Some companies are making progress. Between 2021 and 2025, AT&T Inc cut its Scope 1 emissions by 48%, while 3M Co reduced them by 58% and McKesson Corp by 39%, according to the report.
While 84% of S&P 500 companies disclose climate-related data, only 34% of Russell 3000 companies report greenhouse gas emissions – a figure that has remained largely flat since 2022. The relatively low reporting rate reflects the absence of federal requirements for US companies to disclose emissions from their operations and supply chains. – Bloomberg
