Introduction

Corporate commitments to achieve net zero greenhouse gas (GHG) emissions by mid-century have proliferated with remarkable speed. In a global sample of 1,972 large companies, the number of such commitments increased from 70 in 2019 to 1,236 in 2024, representing 63% of the universe. This rapid diffusion has made long-term net zero (LTNZ) commitments a central feature of corporate climate strategy. These targets require firms to articulate a pathway to deep decarbonisation over multiple decades, spanning leadership cycles and technological uncertainty. However, it remains unclear whether these commitments lead to substantive near-term changes or serve as symbolic gestures, often termed “greenwashing”. This research examines whether the adoption of LTNZ targets is associated with observable changes in corporate emissions and management practices in the immediate years following adoption.

Data

The study utilizes a multi-dataset strategy to address measurement challenges. For emissions, the primary dataset is provided by Trucost, covering approximately 1,600 publicly listed firms from 2015 to 2023. This is augmented with high-quality sector-specific carbon intensity measures for 200 firms from the Transition Pathway Initiative (TPI). To measure climate management and governance, the research employs data from the TPI Management Quality (MQ) framework, which assesses 19 standardised indicators across 1,400 firms. These indicators are aggregated using four approaches: a simple count, a hierarchy of levels (the MQ staircase), a difficulty-weighted score, and thematic groupings aligned with the Task Force on Climate-related Financial Disclosures (TCFD) framework. Robustness checks are further conducted using voluntary disclosure data from the CDP database for 1,377 firms.

Empirical strategy

To address the voluntary and endogenous nature of target adoption, the research employs a staggered difference-in-differences (DiD) approach combined with propensity score matching. Adopters are matched with a control group of non-adopters sharing similar pre-adoption characteristics, including market capitalisation, absolute emissions, emissions intensity, and existing management quality. The final matched panel includes 906 firms. The analysis exploits variations in adoption timing between 2020 and 2023 to assess post-adoption trajectories relative to matched peers. This design helps mitigate selection bias, as firms with stronger existing governance are statistically more likely to adopt LTNZ targets.

Results

The research finds little evidence that the adoption of LTNZ targets is followed by large or immediate reductions in corporate emissions. Across multiple measures, post-adoption estimates for absolute emissions and intensities are generally negative but imprecisely estimated, making them statistically indistinguishable from zero in the short term. For example, while Trucost absolute emissions declined by approximately 7% on average between 2019 and 2023, this trend was consistent across both adopters and matched non-adopters.

Regarding climate governance, the unweighted MQ count and level indicators exhibit a counter-intuitive negative post-adoption pattern. This is attributed to a convergence process where non-adopters are catching up with adopters on basic practices, such as publishing a climate policy or disclosing Scope 1 and 2 emissions. However, a different pattern emerges for more demanding, strategic practices. The difficulty-weighted MQ score and the Strategy thematic group show positive, statistically significant improvements. These improvements often begin shortly before formal adoption, suggesting an anticipation effect where firms adjust their internal strategy prior to making public announcements.

Discussion

The findings suggest that LTNZ targets are neither purely symbolic nor immediately transformative. Instead, they appear to be embedded within a gradual process of organisational change. The presence of negative (though noisy) emissions estimates and selective shifts in strategic management indicates that these targets are more than costless statements. They appear to formalise and lock in strategic directions that are already emerging within the firm. For investors and policy-makers, the results suggest that headline net zero commitments should be interpreted cautiously as indicators of near-term performance. The report recommends placing greater emphasis on interim targets, capital expenditure (capex) investment disclosures, and detailed transition planning to strengthen the link between long-term commitments and substantive near-term action.