Australia is targeting a 62–70% emissions cut by 2035. For businesses, aligning with this ambition means adopting credible, science-based net zero strategies to manage risk, meet investor expectations, and create long-term value.
2 December 2025
Despite the Coalition government scrapping its commitment to net zero, the current government – set to remain in place for at least the next two and a half years – is increasing national ambition, and by all accounts, the momentum is unstoppable. The Australian Government’s 2035 NDC – or Nationally Determined Contribution, of a 62–70 per cent reduction in emissions, sends a clear signal for action and marks a decisive step toward a low-carbon economy.
Achieving this target will depend on coordinated action. While government policy sets the framework, corporate Australia will carry much of the responsibility for delivery.
With most of the global economy committed to net zero, these ambitions will shape investment priorities, influence market positioning, and define how organisations manage regulatory exposure and operational risk. For companies, establishing a net zero pathway pathway aligned with science-based targets provides a credible north star, a clear direction grounded in climate science. Levering a recognised framework companies can manage transition risk, attract investment, and demonstrate leadership in a market that increasingly rewards transparency and accountability.
The strengthened 2035 target gives businesses greater certainty to plan capital investment, product development, and supply-chain strategy. It confirms that Australia’s decarbonisation pathway will continue to deepen, with clear implications for corporate strategy.
Aligned to the target, the government recently released its Net Zero Investment Guide – the NDC Investment Blueprint, which sets out how national climate commitments can translate into investable opportunities. Australia’s abundant renewable resources, critical minerals, skilled workforce, and stable political environment make it an attractive destination for global capital.
Policies that are deepening the shift include the focus on climate risk and opportunities in line with the mandatory climate-related disclosures under the Australian Sustainability Reporting Standards (ASRS). From January 2025, Group 1 entities must report, expanding over the next two years to include thousands of companies nationwide. These disclosures will expose how effectively organisations are managing emissions (including scope 3 emissions from year 2) and climate risks and opportunities, while also creating unprecedented visibility for investors and regulators.
Expectations are also intensifying across supply chains. As more companies set climate targets, they demand deeper emissions data and disclosure from suppliers. This is reshaping procurement and driving a shift toward value chain-wide accountability.
Together, these signals point to a single direction, setting a credible decarbonisation pathway and science-based target, will soon be an expected part of core business practice.
Australia’s emissions reduction trajectory will be guided by the Net Zero Plan, which outlines six sectoral strategies: electricity, transport, industry, resources, agriculture, and the built environment, each with targeted interventions. This approach mirrors what leading companies must do to operationalise ambition: define specific pathways, based on science, that align with their industry context.
The Science Based Targets initiative (SBTi) provides its own sector-specific pathways for industries, including the built environment, forestry and agriculture, financial institutions, industry, energy, and transport, with more in development. These pathways guide companies in setting emissions reduction targets aligned with science and defining practical decarbonisation strategies. Just as Australia’s Net Zero Plan uses sectoral roadmaps to drive national action, these frameworks help businesses translate ambition into clear steps and position themselves to lead the net-zero transition.
Embedding this sectoral thinking into corporate planning not only strengthens credibility but also helps anticipate regulatory tightening and market shifts. Government pathways are a subset of science-based target pathways, so setting an SBT will inherently cover national commitments under NDCs. This positions companies to act decisively as expectations rise across every part of the economy.
The SBTi’s 2025 Trend Tracker shows a 227% global increase in companies setting validated climate targets, with Asia-Pacific markets leading growth. ASCI released data this year stating that more than 130 of the ASX200 companies have net zero commitments, an 8% increase from 2023 to 2024.
Additionally, a new report analysing over 4000 companies shows the world’s largest companies are renewing net zero commitments across their value chains and achieving stronger decarbonisation results. The increase in target setting and emissions reduction initiatives is despite an evolving political and regulatory context.
Companies across the world, including North America, are adopting a wider set of tools to reduce emissions and integrating climate action into core business strategies. A key finding in the report is that almost 90% of companies link decarbonisation efforts to business value, positioning emissions reduction as a driver of resilience and long-term competitiveness.
1. Strengthening Investment and Market Confidence
Case Study: PayPal set ambitious science-based targets aligned with a 1.5°C pathway and committed to net zero before 2040. The company developed a comprehensive emissions inventory and reduction strategy, securing SBTi validation. Targets include reducing Scope 1 and 2 emissions by 25%, cutting Scope 3 by 25%, and engaging 75% of suppliers by 2025, actions that reinforce investor confidence and position the business as a climate leader.
2. Managing Regulatory and Transition Risk
Case study: A leading food company validated a science-based target and FLAG requirements to align with evolving compliance standards. It established a transparent emissions baseline and a clear roadmap to support accurate reporting and future regulatory obligations, while strengthening supply chain governance and data integrity.
3. Driving Innovation and Operational Performance
Case study: Lipton Teas and Infusions developed an ambitious yet pragmatic reduction roadmap aligned with validated science-based targets. The plan balances rapid decarbonisation with long-term transformation, enabling early action to decouple growth from emissions and set a leadership benchmark for its supply chain.
The coming decade will define how Australian industries adapt and compete in a global net zero economy. Establishing a science-based target is a practical and credible step for aligning with this direction.
It enables better decision-making, sharper capital allocation, and transparent communication with investors and stakeholders.
Our experience shows that organisations that embed science-based pathways not only reduce emissions but also build stronger data capability, improve collaboration, and unlock innovation potential.
If you want to know where to start, are going through the process and need guidance, or if you require assistance to update your interim targets, we have many resources to help. Please reach out to us directly if you’d prefer to chat with one of our experts.
Science-based Targets. What Are They And Why Set One? | Australia
Addressing climate challenges, and looking ahead toward a sustainable future – Effective Target Setting: A Critical Pathway To Net-Zero | Australia
A practitioner’s guide to navigating the trade-offs of SBTi target validation To SBTi, Or Not To SBTi? | Australia
The Science Based Targets initiative recently launched its first global register of certified target-setting experts to strengthen technical capacity and help organisations develop credible, science-aligned decarbonisation plans. Anthesis has qualified experts around the world, supporting organisations and peers in every region to set and implement robust, science-based targets.
Anthesis has helped hundreds of organisations globally with their science-based targets, enabling them to set credible emissions reduction pathways, integrate climate goals into business strategy, and drive measurable progress toward net zero.
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