Investors, consumers, workers and the public increasingly want companies to account for their climate impact. Many companies now have climate targets. The harder question is whether those targets are leading to real emissions cuts.
What does accountability look like?
Accountability starts with disclosure. The UN High-Level Expert Group (HLEG) says companies should report their GHG emissions, net-zero targets, transition plans and progress, with reported emissions reductions independently verified.
This information allows us to compare what a company has promised with what its emissions and business decisions actually show. Gaps between the two can raise greenwashing concerns.
Three questions can help make that comparison:
What has the company committed to, and how credible is it?
What do its emissions actually show?
And is the company acting consistently with those commitments?
What has the company committed to, and how credible is it?
Not all climate targets are equally meaningful. For businesses, the UN HLEG says credible net-zero commitments should align with climate science, cover relevant Scope 1, 2 and 3 emissions, and include meaningful interim targets.
How the target will be met matters too. Cutting emissions directly, within a company’s own operations and across its value chain, is different from relying heavily on future removals or carbon credits. The UN HLEG says voluntary carbon credits should not count towards a company’s interim emissions reductions.
The wording also matters. Net zero and carbon neutral are often used interchangeably, but they imply different levels of ambition. Carbon neutrality can rely more heavily on offsets, while corporate net-zero frameworks such as the SBTi standard require deeper emissions cuts, with removals used for the emissions that cannot be eliminated. Vague terms or distant deadlines can make a commitment sound stronger than it is.
What do its emissions actually show?
Reported emissions show the direction of change, but the headline number alone can be misleading.
Total emissions VS. emissions intensity. Absolute emissions show a company’s total GHG emissions. Intensity measures emissions relative to output, revenue, or another business metric. Intensity can improve even while total emissions rise if the business grows faster than emissions fall. The GHG Protocol recommends reporting absolute emissions alongside intensity targets.
Scope 1, 2, and 3: what is counted and how much detail is disclosed. Scope 1 covers direct emissions from sources the company owns or controls, Scope 2 covers purchased energy, and Scope 3 covers other emissions across the value chain. If Scope 3 is the largest share, falling operational emissions can hide stagnant or rising value-chain emissions. Even when Scope 3 is reported, aggregate figures can hide important detail, for example, how much of purchased-goods emissions comes from high-emitting materials such as steel.
Business changes and comparability over time. Growth, acquisitions, divestments and changes in reporting boundaries or methods can all affect reported emissions. Significant structural changes can make year-to-year comparisons misleading. The GHG Protocol therefore requires companies to recalculate their base year when those changes are significant.
Is the company acting consistently with its commitments?
Targets show intent. Emissions show the past. Today’s business decisions show direction.
Follow the money. Where do capital spending and R&D go? Are operations and supply chains changing? Do governance and incentives support the transition? A recent Nature Communications study found that the transition plan by Korea Electric Power Corporation (KEPCO) was misaligned with all six Paris-aligned pathways assessed. Researchers projected emissions from KEPCO’s existing and planned power assets, then compared its cumulative 2020–2050 emissions with company-specific carbon budgets. Even under KEPCO’s stated plan, projected emissions exceeded the budget in every case.
Beyond physical assets and operations, a company’s policy positions, lobbying and participation in industry associations, can also show whether its wider actions support or undermine its stated climate commitments.
When do greenwashing concerns arise?
Greenwashing concerns can arise at any of these points: when a target sounds stronger than it is, when emissions data give an incomplete picture, or when business decisions do not match public commitments. The UN’s guidance on greenwashing points to warning signs including vague net-zero claims, claims without credible plans, and selective presentation of environmental improvements.
Unclear reporting boundaries are one example. Hyundai’s 2025 sustainability report reported 2024 steel and aluminium use at about 0.33 tonnes per vehicle, without explaining that materials contained in externally purchased parts and semi-finished products were excluded. Hyundai later added that note in its 2026 report. Without that clarification, readers could assume the figure covered the full vehicle, when it did not.
