Learning From Failure: Missed Sustainability Targets and the Lessons They Can Teach Us

As businesses continue to work toward their sustainability commitments and set new goals, a disconnect between these ambitions and reality has emerged. Over the last two years, we’ve seen a steady stream of high-profile sustainability target recalibrations, retreats and delays, blurring the narrative on progress and heightening scrutiny of new commitments.  

In addition to those in the headlines, many companies are more quietly missing targets, but avoiding the consequences (negative news cycles, stock price impacts, shareholder proposals) by going quiet on communications—whether that’s burying information in a report, avoiding specific language like “fail” or “missed” or not publishing communications on progress at all.  

Don’t get me wrong; I am not making a case for hiding failure. As researchers at Harvard Business School argue, punishing those who communicate about missed targets while others avoid scrutiny in silence means we are incentivizing the wrong behavior and missing opportunities to learn from failure.   

The challenges leading to missed targets are unique for every business, but there are some common threads:  

1) Politicized and litigious operating environment.

The Trump administration has moved quickly to reverse climate-related progress of its predecessors, withdrawing from the Paris Agreement, pausing permits for new offshore wind power, freezing funding to expand EV charging and proposing sweeping cuts to many agencies including the U.S. Environmental Protection Agency. At the same time, the impacts of climate change and the need to address them are clear, and businesses and non-profits are picking up the torch.  

Consequently, sustainability-focused litigation is on the rise, and following last year’s EU ban of greenwashing, we’re only likely to see greater scrutiny of businesses’ environmental claims in the next few years.  

2) Quickly evolving climate disclosures.

Reporting and disclosure are necessary tools for accountability, yet can be burdensome for small sustainability teams, especially in a constantly shifting regulatory environment. Teams are spending valuable time and resources dissecting regulatory requirements and refreshing reports, which they could be spending on the work itself.  

• Federally, as anticipated, acting U.S. Securities and Exchange Commission Chair Mark Uyeda has halted defense of the SEC’s climate disclosure rule in court, putting into motion a process to dismantle the rule that would have required public companies to report on climate and environmental impact.  

• Among states, California’s climate disclosure laws are moving forward with implementation and similar legislation is being considered in New York, Illinois and Washington.  

• Globally, on February 26th, the European Commission adopted several new proposals significantly reducing the reporting required under the Corporate Sustainability Reporting Directive (CSRD). Companies based outside the EU will only be required to comply with CSRD if they generate €450M+ in annual turnover in the EU. The overall changes reduce the number of companies required to comply with CSRD by about 80%.  

3) Limited availability of scalable, commercialized technology to support ambitions.

Climate tech has rapidly advanced over the last two decades, often outpacing expectations, but it still requires significant capital investment at early stages and time to prove feasibility and market viability. In many cases, companies made assumptions within their sustainability commitments about industry-wide technologies and advancements that would enable their progress—and those assumptions haven’t materialized.  

4) Short-term economic pressures and financial barriers.

Facing a volatile economy due to increased tariffs and shifts in federal spending, businesses are looking for ways to keep prices low, especially in the short term, to continue meeting customer expectations on affordability. Even if a business sets sustainability goals with the best intentions, when short-term financial realities and challenges of commitment set in, reassessing goals becomes necessary.  

5) Complexities of managing Scope 3 emissions.

Scope 3 encompasses all the emissions of a company’s value chain – on average it accounts for 75% of a company’s overall emissions – but it is the hardest to measure. Many businesses lack the technology, systems and expertise to accurately track emissions, leading to gaps in data. Businesses are left with incomplete or inaccurate information from suppliers, which hampers their ability to make progress on Scope 3.  

Considerations for Communicators

There is no one-size-fits-all approach—especially when communicating about a missed ambition. Leaders have to weigh the risks extremely carefully. However, I want to make the case for greater transparency on challenges and what businesses are doing to solve them—even if the approaches don’t work the first, second or hundredth time. This is already being done in many places via coalitions, roundtables and in strategic partnerships, but there’s much more we can do to normalize failure, learn from it and share the benefits together. It starts with all of us—advisors, communication leaders, consultants, media and other stakeholders—asking the tough questions, being curious about the learnings and not solely focusing on results.