How Climate Targets and Actions Fit into Your Business Strategy

Melissa Donnelly

Associate Director

Drummond Lawson

Director

Table of Contents

• Navigating Risks
• Identifying Opportunities
• Integrating Climate Action
• How Anthesis Can Help
• Contact Us

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Embedding target setting and achievement into business functions, budget processes, and 1-to-3-year strategic plans is critical to incremental–and ultimately transformative–change and resiliency.

Companies have been setting climate targets for more than 20 years and the rate of target setting, as well as the aggressiveness and coverage of these targets, has increased in large part due to pressure from external stakeholders, including customers, regulators, and investors.

Climate targets are the most viable way for companies to navigate risks, create opportunities, and ensure long-term resilience and profitability in a changing world. 

Navigating climate risks

Climate risks encompass the potential financial and operational impacts that may affect a business because of climate change. They include both physical risks and those associated with the transition to a low-carbon economy:

• Physical risks: Climate change creates physical risks, including extreme weather events that damage infrastructure, disrupt supply chains, and increase operating costs.
• Transition risks: As more companies and countries transition to a low-carbon economy, transition risks include changes in regulations, market demand for sustainable products, and technology disruption.

Companies should assess and quantify these risks across their value chain, develop a plan to address and mitigate them, and report these risks and plans publicly.  By adopting effective governance, risk management, and strategic planning practices, companies can enhance their resilience to various risks and capitalise on emerging opportunities. Clear and comprehensive reporting further empowers them to make informed decisions for future growth while keeping stakeholders well-informed about their operations and successes.

Identifying opportunities

In addition to navigating existing and potential risks, targets can also function as a doorway to new opportunities by spurring on innovation and enhancing cost savings:

• Innovation and new markets: The transition to a low-carbon economy can present opportunities for innovation in sustainable products and services. Companies that develop offerings that deliver sustainable attributes to their customers will be more competitive and increase their market share.
• Cost savings: Improving energy efficiency, integrating renewable energy into your portfolio, and reducing waste in operations can lead to significant cost savings.

Organisations that embed sustainability into their core strategies not only help build a more climate-resilient future but also gain a competitive edge and unlock new avenues for value creation. Integrating circular business models, sustainable product and packaging design, and waste reduction initiatives serves as a catalyst for environmental progress—driving innovation, strengthening resilience, and supporting the achievement of ambitious climate targets.

Integrating climate action into business functions 

In tandem to setting near- and long-term climate targets, companies should create a decarbonisation roadmap that details emissions reduction measures by category of emissions from the base year through the goal year of their climate targets. Measures can include energy efficiency and renewable energy within owned and leased operations, as well as supplier engagement on upstream emissions reductions and product adjustments to impact downstream use of sold products.

Companies should update their decarbonisation roadmaps  annually to reflect business changes and budgets and to integrate actual data to replace modeled projections. These plans allow companies to integrate targets–and the measures needed to achieve them–into business functions, annual budgets, and 1-to-3-year strategic plans that drive resilience.

By disclosing and reporting on these activities, companies can share with their external stakeholders their progress on climate action, further demonstrating their value.

How Anthesis can help

Climate targets and action have played a major role in how corporations have evolved over the last decade and will continue to drive the way companies do business in a world that has already breached 1.5° C of warming and is experiencing increasingly urgent effects of climate change.

Achieving net-zero demands a comprehensive, coordinated effort across every facet of an organisation. Anthesis supports businesses in navigating the complexities of decarbonisation with customised strategies and services aligned to their unique goals. By drawing on the deep expertise of our decarbonisation specialists and a systems-wide approach, we help accelerate emissions reduction, strengthen climate resilience, and uncover new commercial opportunities.

Our team offers strategic advice on energy and carbon transitions, delivering localised insights and decision-making support to drive sustainable growth—both now and into the future.