Why Carbon Targets Still Matter: Even When Regulations Are Under Scrutiny

In a time when sustainability regulations are being stripped back, delayed or diluted, it’s easy for leadership teams to question whether carbon reduction targets are worth the effort. If the pressure to report is easing, why continue pushing for climate action?

The answer is simple: climate risk doesn’t go away just because the rules change. For companies that want to stay competitive, resilient and credible, voluntary action on carbon reduction is still essential.

But it must be done right.

Why set carbon reduction targets at all?

Setting carbon targets is about more than regulatory compliance. It signals leadership, creates internal focus, and drives innovation. It also prepares organisations for future investor scrutiny, customer expectations, and supply chain pressure – all of which remain strong, even in a looser regulatory environment.

Without targets, climate ambition remains vague and unfocused. But if targets are too aggressive or poorly informed, they risk being quietly rolled back a few years later. This undermines trust and makes future action harder to justify.

The key is to set ambitious but achievable targets based on a clear understanding of your carbon footprint and the financial implications of reduction pathways.

The foundation: robust carbon data

No target can be credible without understanding where emissions come from. This means having robust carbon data across Scope 1, 2 and 3.

Too often, companies rush to announce net-zero targets without grasping the full scale, or cost, of achieving them. That’s especially true for Scope 3, where emissions often dwarf direct operational footprints and where the data is murkiest.

To set credible targets, organisations need:

• Accurate data for major emissions sources (especially high-impact Scope 3 categories like purchased goods and services, capital goods, and transport).
• Reasonable estimates for lower-impact categories, rather than perfection across the board.
• Prioritisation, to focus data improvement efforts where they matter most.

Which data should be robust, and where can you use estimations?

Not all carbon data needs to be perfect. Leaders need to distinguish between:

• Material categories where poor data could skew the footprint and affect decisions (e.g. procurement spend, business travel, key suppliers).
• Peripheral categories where spend-based estimates are good enough, especially in early stages.

Trying to achieve 100% precision across an entire footprint is costly and often unnecessary. Instead, organisations should invest in improving data quality where it directly affects strategy and target-setting.

The realities of carbon data collection

Gathering carbon data to set meaningful targets is often the hardest part – especially for Scope 3, where emissions sources are wide-ranging, scattered, and difficult to track.

Organisations face five core challenges:

• Breadth of categories: Scope 3 includes up to 15 emissions areas, many of which require input from different teams with limited carbon literacy.
• Data quality and gaps: Spend-based estimates are useful but crude, masking supplier differences and making year-on-year comparisons unreliable.
• Time intensity: Building even a basic footprint can take weeks of coordination across departments, and many sustainability teams are already stretched thin.
• Changing methodologies: Emissions factors, calculation methods, and category definitions shift over time, complicating consistency and long-term tracking.
• Cross-team friction: Carbon data isn’t owned by one function. Procurement, finance, operations and sustainability all play a role – often with conflicting priorities.

The result? Many targets are built on shaky foundations. Improving data collection isn’t about chasing perfection — it’s about focusing efforts where they matter most, and building shared responsibility across the business.

Choosing the right type of target

While the Science Based Targets initiative (SBTi) remains the gold standard, its technical requirements, particularly around Scope 3, have led some organisations to look for alternatives. For example, if an organisation has a clear transition plan for their business, then targets can revolve around the transition plan. This makes absolute sense. An example could be the production of a product in a zero carbon process, or increase the sales of a product that supports the transition. These are known as transition specific alignment targets. It could also be that while a Scope 3 portfolio is wide, the limited control over the Scope 3 emissions means that specific categories are carved out for target setting. These are the ones deemed material to the business.

A difficult area that businesses are grappling with are supplier reduction targets. How to control the supply chain emissions especially when you don’t have the purchasing power, becomes difficult. Therefore, engagement becomes critical, but without binding the business to achievement of the supply chain.

There are different options, but what matters is transparency and integrity. It’s not just the target itself, but how it was set, what assumptions lie underneath and whether the business is able to go further without hamstringing itself or not.

Scope 3: the hardest work lies ahead

Whatever the target that is set, the real challenge isn’t setting a target. It’s building a plan to achieve it – especially for Scope 3. What are the reduction levers, and do they sit within your influence, or direct control.

Purchased goods and services, in particular, represent the bulk of many companies’ emissions. So depending on the business, one needs to consider what reducing these emissions means, does it mean:

• Engaging deeply with suppliers
• Identifying if the supply chain has high carbon inputs that can be switched to lower-carbon inputs
• Are there high carbon products or processes that can be re-engineered?
• Are there suppliers in the chain who are just irresponsible businesses and are at risk of being stranded during a climate or energy transition.

The above relates to types of targets that can be set. Within a supply chain that reduces risk to your business. It may mean carving out smaller targets within the scope 3 inventory, BUT the work that you take will be more targeted and impactful against your risks.

However, despite the scale of the challenge, many companies are not embedding target delivery into their financial planning. Procurement budgets remain disconnected from climate goals, and capital allocations don’t reflect decarbonisation timelines.

If targets are to be meaningful, finance must be at the table. Delivering on Scope 3 targets requires more than goodwill:  it requires cashflow, CAPEX alignment, and long-term investment planning.

In summary

Carbon targets are still critical, even when the regulatory spotlight fades. But they must be informed, realistic and financially grounded. That means:

• Getting a clear picture of your emissions
• Improving data quality where it matters most
• Choosing targets that fit your ambition and capability
• Doing the hard work to embed delivery into core operations

Sustainability isn’t about chasing perfection. It’s about making steady, credible progress, backed by the right data, the right decisions, and the right level of leadership commitment.