Closing the Gap: Navigating the Ambition-Action Gap in Sustainability

November 20, 2024

Over the last several years, global companies have been setting increasingly aggressive targets, and this movement continues to accelerate in 2025. Yet, recent research from Climate Impact Partners reveals that only 10% of Fortune Global 500 companies are delivering on their ESG targets despite having a clear roadmap for decarbonization¹.

This blog explores common barriers that may prevent companies from driving sustainable impact and provides actionable steps that businesses can take to move beyond ambition to achieve measurable impact.

The Ambition Gap: A Common Story

building skyline with green trees

Today, most companies set targets at the enterprise level without thinking through the operational implications and associated costs—only to find out their plan is a non-starter. This siloed approach to implementation rarely moves the needle, and we find it often creates a compounding gap between goals and what can be accomplished.

Take for instance an example of a company that set a 24% decarbonization goal for 2022. The program had a strong start but ran into some of those common obstacles. Ultimately, the company fell short of their 2016 target of a 10% reduction because they couldn’t implement projects fast enough.

A closer look at the project pipeline revealed another potential gap in the company’s 2020 targets. Because most of the ‘low-hanging fruit’ was implemented in the first year, the remaining projects had up to a two-year payback. While these were still within the hurdle rate, not all sites had the bandwidth, expertise, or budget to develop an implementation plan on their own – let alone execute the plan.

Reaching the 2020 milestone target would require a significant capital investment and CFO approval, but individual sites had not planned for these projects, mostly because of competing business priorities, which resulted in capital allocation falling short, and an even bigger gap created. Ultimately, in this scenario, the company missed its 2022 target by a significant amount, achieving only slightly more than half of the goal it had announced publicly.

This situation is not uncommon, but why is it happening? What’s driving this gap between corporate objectives and individual site priorities? Today, we see two prevailing trends:

1. First, sites are not being measured adequately for achievement of goals. Plant and facility management have many priorities competing for attention and budget. Furthermore, sometimes energy efficiency and sustainability are perceived as conflicting priorities to site KPIs such as productivity and quality.

2. The second trend we’re seeing is that projects are getting implemented in silos with little collaboration or knowledge-sharing between sites, and limited coordination with corporate teams. Lack of a cohesive plan means missed opportunities for efficiencies and economies of scale and slow progress towards corporate goals.

Barriers to Sustainability Success

Our experience shows that many companies face common hurdles, which are often more organizational than technical. We have identified these four key challenges:

Governance Alignment: Governance is the playbook for any sustainability program. Achieving alignment at both the enterprise and site levels is crucial for the program's success, making proper governance indispensable. Aligning corporate and site-level stakeholders ensures that sustainability ambitions are in sync with operational performance goals—and all stakeholders are aligned with accountability. Discover how good governance can be achieved in this blog, The road to success: The crucial role of governance in sustainability programs.
Financial Enablement: Another common barrier to action is financial enablement and the ability to pursue opportunities beyond immediate gains. A robust financial enablement strategy is essential for companies of all sizes that aim to achieve long-term sustainability goals. Whether mitigating financial risk, safeguarding cash flow, or divesting assets from balance sheets, flexibility is furnished to pursue sustainability objectives without undue financial strain. Discover how to overcome this barrier in this blog, Funding the Future: Financial Enablement for Sustainability Initiatives.
Data Transparency: A holistic view of enterprise-wide metrics with shared KPIs empowers agile, efficient, and evidence-based decision-making. This approach not only enhances transparency on corporate sustainability progress but also reveals opportunities for efficiencies and economies of scale.
The need for transparency and an end-to-end view of sustainability data is becoming increasingly important among business leaders. In a 2024 survey conducted by Verdantix, over 70% of executive respondents said they are placing high priority on ESG and sustainability data improvements in the next two years.
Real-time insights inform procurement strategies, track progress toward sustainability goals, and optimize efficiency across portfolios. Furthermore, data transparency is crucial for ensuring the accuracy and completeness of information, which is essential for auditing and compliance. It enables organizations to meet regulatory requirements and mitigate potential legal risks.
Enterprise-Wide Execution: Scaling sustainability initiatives across complex portfolios requires a strategic and programmatic approach. Opportunities for energy reduction, electrification, and renewables implementation are identified, crafting unique solution playbooks tailored to each client's requirements. By orchestrating the entire process from planning to execution, performance, quality, and continuous optimization are sustained over time. Find out how Roca Group has scaled sustainability actions across their enterprise to achieve operational excellence in this blog.

Paving the Way for Success with Schneider Electric

At Schneider Electric, we are dedicated to helping clients make a significant impact that distinguishes them as industry leaders. Our clients often describe us as the “easy button” for sustainability and infrastructure projects. We take great pride in our global and integrated approach to driving sustainability success across all industries and sectors.

To guide our clients from strategy to action, we employ a highly collaborative and consultative approach, deeply engaging with a wide array of client stakeholders and C-level sponsors. We begin with strategy, seeking to understand their current performance and growth plans, forming a strategy and targets with inputs from both corporate and site levels. Subsequently, we establish a “one truth” data platform to support investment decisions and progress tracking.

This consulting work evolves into a strategy roadmap with an integrated approach to decarbonization. This roadmap encompasses Scopes 1, 2, and 3, using efficiency and electrification solutions, planning for the transition to low-carbon energy, and fostering similar change throughout the supply chain.

Sustainability Pays

With our extensive experience, we understand that when sustainability is approached correctly, it pays off, and success extends far beyond decarbonization goals. For instance, companies committed to sustainability:

Outperform their competitors, demonstrating superior returns and corporate longevity. (Source: Global 100, Corporate Knights)
Adopt more innovative solutions. (Source: 2020 Corporate Energy & Sustainability Progress Report, GreenBiz)
Experience greater ease in attracting investors and talent. (Source: A Fundamental Reshaping of Finance, BlackRock)