Introduction

The report examines whether corporate sustainability behaviour and emissions trajectories are aligned with the climate targets of the Paris Agreement. While many large public companies have pledged to reduce emissions, only about 19% of roughly 13,600 firms had emissions pathways aligned with Paris targets by 2020. The study aims to explain why stated commitments often fail to translate into emissions outcomes.

Results and discussion

A systematic categorisation of sustainability initiatives

The study develops a large-scale behavioural dataset using natural language processing to identify implemented sustainability initiatives from corporate sustainability reports. The final sample includes 4,191 publicly traded companies across 51 countries, 11 sectors, and the period 2010–2020, covering around 70% of global public market capitalisation and about 50% of global emissions.
Initiatives are classified by activity type and by their alignment with environmental Sustainable Development Goals. Most detected initiatives relate to SDG 7 (Affordable And Clean Energy) and SDG 12 (Responsible Consumption And Production). Asset modification and procedural changes dominate, while innovation activities such as research and development and new product deployment are less common.

The sustainability behaviour of companies in high-emitting sectors

The analysis focuses on energy-intensive and hard-to-abate sectors, including Energy, Materials, Industrials, and Utilities, which account for roughly 90% of emissions in the sample. Sustainability behaviour is highly skewed, with a small number of large firms undertaking a disproportionate share of initiatives.
Across sectors, companies typically implement a limited number of emissions-related initiatives per year, generally between two and ten per report. Over time, there has been a decline in initiatives focused on internal asset changes and a more recent increase in innovation-related activities, although risk mitigation actions remain dominant.

Using sustainability behaviour to explain companies’ alignment with climate targets

Companies with emissions pathways aligned with a below-2°C target were, on average, higher emitters at the beginning of the 2010s but achieved larger proportional emissions reductions over the decade. This trend holds for both absolute emissions and emissions intensity.
However, the total number of sustainability initiatives does not explain alignment. After controlling for company size, asset structure, historical emissions, sector, country, and reporting characteristics, the number of initiatives is not significantly associated with either the magnitude of deviation from climate targets or the probability of alignment.

The importance of sustainability behaviours to meet climate targets

The decisive factor differentiating aligned and misaligned companies is the composition of sustainability behaviour. Companies aligned with climate targets place greater emphasis on innovation, cooperation, and stakeholder engagement activities, including research and development investment, new products, associations, and communication. These activities are disproportionately linked to SDG 7 and energy transition objectives.
In contrast, misaligned companies focus more heavily on managing existing assets and procedures, such as asset modification and internal process changes, primarily linked to SDG 12. Statistical analysis shows that initiatives over-represented among aligned companies are significantly associated with better emissions alignment, while initiatives over-represented among misaligned firms are not.

Differential behaviour and topics of the disclosures

Topic analysis of sustainability disclosures reinforces these findings. Aligned companies emphasise renewable energy, energy efficiency, and innovation-related topics. Misaligned companies focus more on plant, fleet, and asset management.
Additional analysis of power companies shows that aligned firms have a significantly higher share of renewable energy in their energy mix, indicating that behavioural differences correspond to structural changes in energy sourcing.

Main findings and limitations

The results indicate that misalignment between corporate climate goals and outcomes is driven by an over-investment in risk mitigation actions rather than innovation and cooperation that support energy transition. The study does not establish causality and does not distinguish between effective actions and greenwashing, although reporting standards and audits are used as controls.

Implications of our work

For business leaders, the findings highlight the importance of prioritising innovation-led and energy-focused actions. For investors, the behavioural framework offers a more informative signal of climate alignment than conventional environmental ratings. For policymakers, the dataset supports the development of policies that incentivise effective corporate behaviours and improve sustainability reporting quality.