The new draft of the Science Based Targets initiative (SBTi) corporate net zero standard acknowledges the critical role of companies in mobilizing climate finance and proposes a larger role for market-based climate action tools, such as carbon credits, to accelerate progress. But the proposed updates fall short of what’s needed to meet the scale and timeline of the climate emergency. 

Carbon credits appear in two sections of the draft. First, the draft proposes new near-term carbon removal targets for residual emissions, but only for Scope 1. Second, it proposes stronger incentives for companies to mitigate ongoing emissions on the road to net zero, but leaves this mechanism both optional and vague. 

The draft is not final. SBTi has opened a public consultation period through June 1, 2025.

Removal targets now included 

The draft proposes new interim targets for carbon removal to neutralize residual Scope 1 emissions. Residual emissions are those left at the net zero year, after companies implement all possible emission reduction measures. In most cases, they’ll make up 10 percent or less of baseline emissions. 

To achieve net zero status, companies need to purchase and retire carbon removal credits annually beginning in their net zero year, to neutralize their residual emissions. 

The current net zero standard has no requirement that companies begin funding carbon removal prior to their net zero year — typically around mid-century — nor to estimate what their future removal needs will be. The new draft proposes a more proactive approach, introducing both near- and long-term removal targets that would require companies to ramp up carbon removal purchases on the path to net zero.   

Source: Carbon Gap 2023, Who Can Pay for Carbon Removal?

Scope 1 only

But the draft limits removal targets to Scope 1 emissions only. While near-term targets of any kind are a welcome step, as written they will not not make a major difference in scaling carbon removal, according to Robert Höglund, co-founder of CDR.fyi, a carbon removal market data platform, and a member of SBTi’s technical advisory group. 

That’s because large Scope 1 emitters are less likely to set SBTi targets. Indeed, SBTi will not currently validate targets for companies with direct involvement in fossil fuel extraction. Meanwhile, the bulk of emissions from SBTi-participating companies come from Scope 3 sources. 

Interim removal targets for Scope 1 emissions could create demand for up to 2 million carbon removal credits by 2030 from current SBTi participants, according to an analysis from Isometric, a carbon removal registry. Unfortunately, that’s not nearly enough to bring the planet in line with a net zero pathway by mid-century, a goal that will require gigaton-scale removal. 

What’s more, high Scope 1 emitters typically have the least ability to pay for carbon removal, as they have the thinnest profit margins per ton of emissions. Meanwhile, downstream companies with high profit margins per ton of emissions — such as finance, professional services and technology — have much lower Scope 1 emissions but higher Scope 3. These companies have a unique role to play in helping to scale carbon removal.

SBTi’s reason for not including projected residual Scope 2 or 3 emissions in interim targets is twofold: companies will eliminate all energy generation emissions (Scope 2) by their net zero years, and estimating residual Scope 3 emissions is complex, based as it is on value chain action. But leaving Scope 3 out of interim removal targets means the lion’s share of residual emissions from companies participating in SBTi will remain unaddressed. 

Simplify the calculations  

There’s a simple mechanism to solve the complexity problem. Assuming Scope 3 emissions decrease by 90 percent by mid-century, in line with overall emission reductions, that would leave companies with around 10 percent of their baseline Scope 3 emissions to neutralize at their net zero year. Interim near-term removal targets could start there. 

A simplified calculation like this would avoid placing new, burdensome emissions calculations on participating companies while recognizing the reality of the scope of carbon removal needed to hit climate targets. 

How to address ongoing emissions

Companies will continue to release ongoing emissions on the decades-long path to net zero. They differ from residual emissions, which companies can’t eliminate and will need to neutralize via removals. Both have a large climate impact that will compound year over year for decades. 

The current standard encourages companies to undertake beyond value chain mitigation (BVCM) to minimize the impact of their ongoing emissions, but there’s no requirement nor recognition for doing so. 

Beyond Value Chain Mitigation (BVCM)

Source: SBTi 2024, “Above and Beyond on BVCM”

SBTi’s stated reason for not requiring mitigation of ongoing emissions is that it is aiming to “remain inclusive for companies with varying resources.” This is a surprising explanation. SBTi has never, to my knowledge, mentioned inclusivity as one of its guiding principles. Its publicly stated purpose is to define best practices for science-aligned climate action consistent with limiting warming to 1.5℃ — with no mention of cost. 

The draft says the initiative is seeking new ways to incentivize companies to address ongoing emissions. But this section is among the most vague in the document. Exactly what form this additional recognition will take for companies that choose to mitigate ongoing emissions isn’t defined. 

Similarly, the method by which companies can address their ongoing emissions is also left undefined, but will likely follow one of the options described by SBTi in its report on this topic last year. They are a money-for-ton (or ton-for-ton) approach and using carbon credits to funnel investment into projects that accelerate global climate progress.  

A framework that unleashes climate finance

SBTi is clearly listening. Adding interim carbon removal targets and strengthening recommendations around mitigating ongoing emissions are signs the body is heeding the steady drumbeat of requests from the climate community to open up all mechanisms for global climate action. 

But the draft, as written, hamstrings itself. Including Scope 3 in interim carbon removal targets, and requiring action on ongoing emissions, would transform SBTi’s net zero standard into a mechanism that could unleash one of the most powerful untapped tools for climate action: private finance. 

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Amazon will let companies that have adopted comprehensive emissions reduction goals buy “high integrity” carbon credits generated by carbon removal projects already backed by the $638 billion e-commerce and cloud services company.

The new strategy, announced March 19, applies only to companies cutting greenhouse gas emissions across all three categories: Scope 1 (their own operations), Scope 2 (purchased electricity) and Scope 3 (indirect sources across their supply chain). It’s also available to the 550 signatories of the Climate Pledge, i.e., companies aiming to achieve net-zero status by 2040.

Companies that have already signed up include photo service Flickr, real estate firms Ryan Companies and Seneca Group, consumer electronics maker Corsair, office furniture supplier Steelcase and tech consulting firm Slalom. Interested companies can fill out this form.

“At Flickr and SmugMug, we invest in a number of nature-based solutions for impact beyond just carbon, but they often lack credibility,” said Flickr COO and President Ben MacAskill, in a statement. “Amazon’s expertise and scientific rigor means our team can meet our climate goals with confidence.”

Amazon’s in-house carbon project review process

Amazon is investing heavily in nature-based approaches for sequestering excess CO2 in the atmosphere, and it created its own methodology for evaluating them. That approach, called Abacus, considers issues such as durability (how long the trees are likely to last) and leakage (when a forest restoration project causes deforestation elsewhere).  

“We’re using our size and high vetting standards to help promote additional investments in nature, and we are excited to share this new opportunity with companies who are also committed to the difficult work of decarbonizing their operations,” said Amazon Chief Sustainability Officer Kara Hurst, in the March 19 announcement.

Amazon doesn’t disclose how many carbon credits it buys or retires annually to neutralize emissions. Nor is it revealing how many credits will be available through the new service, an Amazon spokesperson said. The first credits are from Amazon’s relationship with the LEAF Coalition, which has committed $1 billion to development in countries including Brazil.

Amazon reduced its emissions 3 percent year over year in 2023, primarily because of its expansive renewable energy purchases, but its footprint has increased 34.5 percent since its 2019 baseline year.

More than 75 percent of Amazon’s emissions come from Scope 3. The company has prioritized encouraging reductions from a list of high-emitting suppliers that contribute about half of that amount. This new service will support those efforts, although Amazon wants its partners to focus first on efforts to decarbonize their operations. Amazon won’t profit from this program, the spokesperson said.  

Aside from nature-based projects, Amazon has invested in one of the world’s largest direct air capture facilities. The installation by 1PointFive, under construction in Texas, is expected to capture up to 500 million metric tons of CO2 annually when complete. Amazon has committed to buying 250,000 metric tons of that capacity.  

Amazon’s bar for defining high-integrity is less comprehensive than the one set by the Voluntary Carbon Markets Initiative, which guides companies on how to use voluntary carbon markets for net-zero commitments, but it’s a step in the right direction, said Mark Kenber, the nonprofit’s executive director.

“Amazon’s new carbon credit service is a welcome development in scaling the voluntary carbon market,” Kenber said.

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Waste was already baked into apparel business models long before social media influencers made styles lose their coolness on a weekly rather than a seasonal basis. But even as fast fashion drives unprecedented waste, many brands, retailers and startups are slowly advancing circular business models that keep garments in use.

New software startups are rescuing less-than-perfect items, revealing details through artificial intelligence about how brands, retailers and consumers behave. These emerging services are pitching new efficiencies that help to restore or customize clothes, shoes and accessories that otherwise go stale in warehouses, closets or landfills.

In New York, Alternew seeks to streamline consumer repairs and alterations, while Revive is flipping returned goods into new sales for brands. Other repair and refurbishment ventures: Suay Sew Shop formed in 2017 in Los Angeles; Mendit opened in 2019 in Houston; Sojo formed in London in 2020, as did ReCircled in Denver; and Circulo came to life in the U.K. in 2024. And this past February, the Loom app debuted to connect people with designers to “upcycle” their clothes. Tersus Solutions spiffs up used clothes and shoes for scores of branded resale portals.

Of course, Nordstrom and Bloomingdale’s long ago set the bar in retail by offering customers alterations at most stores. And starting 20 years ago, brands such as Levi’s, Patagonia and The North Face launched free or low-cost repair programs, while more recently Ralph Lauren, Arc’teryx, Dr. Martens, Timberland and Reformation have followed. Meanwhile, in addition to its no-cost consumer repairs, Eileen Fisher offers special Mended collections that concoct new garments out of spare parts from old ones.

Low-hanging opportunities

All of these companies are pursuing a share of repair as a business opportunity, one that is attracting even more interest lately as tariffs bring turmoil to supply chains and legislation here and abroad around end-of-life textile management adds pressure on brands.

  • The market for fashion repairs, which has been growing by 2.5 percent annually, will expand from $3.6 billion in 2024 to $4.5 billion by 2033, according to Business Research Insights.
  • Circular business models, including repairs and reuse, could reach $700 billion by 2030, the Ellen MacArthur Foundation projected in 2021. That’s more than 20 percent of the worldwide fashion market.
  • As clothing production has doubled in the first 15 years of this century, the average number of times that someone wears a garment has dropped by 36 percent.

“Even with production separated from consumption, the negative impacts of fashion’s environmental footprint are becoming harder to ignore,” said former Timberland executive Ken Pucker, a business instructor at Tufts and Dartmouth universities. “Images of trashed clothing, consequences of microfiber release and accelerating carbon emissions compromise the planet and, ultimately, the viability of the industry.”

Recent research has quantified that repairs have more power than secondhand sales to prevent or delay new purchases. Eighty-two percent of repair services displace the purchase of a factory-fresh garment, compared with 60 percent for resale services, according to the nonprofit Waste and Resources Action Programme (WRAP). It saves 16 pounds of CO2, roughly equivalent to driving a gasoline car for 20 miles, to repair a cotton T-shirt instead of buying a new one, the report found.

Alternew: connecting brands, consumers and tailors

“There’s a landfill out there with my name on it that I’m personally responsible for,” jokes Nancy Rhodes, cofounder and CEO of Alternew. The former footwear designer’s creations, including for Beyoncé’s House of Dereon and Kenneth Cole, sold at Bloomingdale’s, Nordstrom, Marshall’s and Costco.

Now she’s building a matchmaking service for brands, consumers and tailors. Alternew, which captured $2 million in pre-seed funding in September, is working on a pilot with New York womenswear label Faherty. Brands Everlane and Moose Knuckles are interested in partnering, too.

Retailers spend hundreds of billions of dollars on “returns and churns,” and brands spend billions to lure customers to the register only to lose them after the sale, she noted. “Seventy percent of all apparel returns are due to poor fit,” Rhodes said. “The fashion industry has a 26 percent retention rate when using care and repair services as a brand. There’s data from the market that says a customer is 73 percent more likely to go back to the store within the year based on the services.”

Rhodes described a shopping experience that Alternew would prevent: You try on a pair of pants in a store, but they’re too long, so you walk out empty handed. “Instead of losing the sale, the store associate logs an alteration request immediately [on Alternew], matching you with a local, vetted tailor on our platform, you get a text notification with appointment details, pricing, and then real-time updates.”

That’s an opening for brands to differentiate themselves, according to Rhodes: “Care and repair are an intrinsic core solution to creating an authentic, holistic and circular experience for the consumer.”

Alternew can also provide companies new insights into their merchandise. For instance, maybe 20 zippers on a denim jacket broke across the country, or a high percentage of New England buyers hemmed wide-legged linen pants by 4 inches.

And Rhodes bets that by making it easier for consumers to hem pants or seal busted seams, more people will continue wearing their favorite brands.

“We started by creating a business in a box for tailors, and that allows us to get proprietary data that doesn’t exist today, so we can match the right tailor with the right product,” she said. “Because the tailor that hems a pair of jeans isn’t necessarily the same tailor that’s going to take in a Gucci blazer. Customers get a perfect fit, and tailors get new clients.”

Revive: Making repairs at scale

Revive originated out of Hemster, a repair and alterations startup founded in 2017 that has serviced Zara, Diane von Furstenberg and Reformation. Yet Co-founder and CEO Allison Lee swerved in a different direction in 2022, when she noticed brand warehouse managers using the service’s business-to-consumer repair portal to process dead stock and damaged goods. 

Said Lee: “That’s really how we accidentally discovered this huge problem that brands seem to have around their inventory and debt, the damages and returns and such.”

After raising $3.5 million in seed funding last June, Revive became profitable at the end of 2024. Lee said it processed 500,000 units last year, which could triple in 2025. “There’s a lot of tailwind we’re feeling right now,” she said, as brands reevaluate their supply chains due to tariffs.

Reformation views cleaning and repairing items in-house as a competitive advantage that reduces waste.
Reformation is among the brands that views repairing items in-house as a competitive advantage. Credit: Trellis / Elsa Wenzel
Source: Trellis Group / Elsa Wenzel

Brands create $740 billion of unproductive inventory annually, “the equivalent of every single unit sold on Amazon going directly to landfill,” Lee said. Yet companies only write off one-tenth of their inventory.

Brands often categorize returned items as “damaged” despite what are often trivial issues, including cat hair, wrinkles, a tear in the plastic wrap or a dent in the shoebox. Instead of recycling or donating those goods, Revive cleans, sews, re-tags and repacks them. Revive can help brands sell 95 out of 100 items it processes, according to Lee. The company re-routes the remainder for recycling or donations. 

Revive, which takes a fee for the logistics and a commission for each sale, sits between brands and several third-party logistics companies across the U.S. It moves merchandise in a few weeks that might otherwise rot in a warehouse for a whole season. The service combines its inventory records with pricing data from 30 sales channels, including Macy’s, Nordstrom, eBay and Poshmark, in addition to influencers who livestream sales.

“We basically look at this clean system on record and we’re like, oh, Michael Kors handbags sell really well on Whatnot, but the shoes sell better on Poshmark,” Lee said of patterns Revive’s artificial intelligence reveals.

“The sustainability narrative puts too much pressure on consumers to buy better and throw out less,” Lee said, but the bigger impact is in reducing business waste. “The items that I’m getting from the brand equal a million people reselling their goods, and that’s coming from like four brands.”

[Connect with the circular fashion community and gain insights to accelerate the shift to a circular economy at Circularity, April 29-May 1, Denver, CO.]

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Recent headlines paint a gloomy picture for corporate sustainability. Coca-Cola, Walmart, UBS and Microsoft are just some of the companies accused of watering down their climate commitments. But a survey of close to 7,000 company disclosures made to CDP in 2024 suggests that media coverage of individual companies may be missing broader trends.

“I expected to see more companies backing off,” said David Linich, a sustainability partner at PwC, the consultancy behind the survey. “It seemed like there was a mass retreat. But the data showed otherwise.”

PwC used a combination of human analysis and AI to mine the CDP dataset, which Linich said was broadly representative of the larger economy. Here are some highlights:

Not just staying the course, but accelerating

The PwC team found that 84 percent of companies are sticking with climate goals, and 37 percent are increasing them. That includes all 47 companies that saw a change of CEO since setting their target. “None of those companies backed off their commitments,” wrote the report authors.

In fact, companies anticipate more money will be flowing into climate transition projects over the next few years. Capital and operating expenditures on climate are expected to grow by 18 percent and 21 percent, respectively, between 2024 and 2030.

Of the 16 percent of companies who restated targets, half did so for what Linich described as “legitimate” reasons. This group includes companies that set targets without having created a detailed transition plan. Those that have now done so, are still investing but have realized their transition will take longer than anticipated.

One notable question is whether these commitments, which were made in disclosures filed before President Trump took office, will survive a presidency that appears intent on dismantling policies designed to tackle climate change. 

Emission goals are alive

Recent research has delivered worrying prognoses for current emissions targets. An Accenture report published last year, for instance, found that just 16 percent of companies with targets were on track to hit them. The PwC analysis, by contrast, suggests the idea is in good health: Two-thirds of companies are on track to hit their targets for Scope 1 and 2, and  half are on track for Scope 3.

Breaking the numbers down by sector revealed a correlation between ambition and progress. Simply put, sectors that set more ambitious targets are generally exceeding them, while those with more conservative goals are off track. Unsurprisingly, the trend reflects the abatement options open to different industries. Tech companies, for example, can often make a significant dent in their carbon footprints by switching to renewables. Finding a low-carbon energy source for ocean-going tankers is more challenging, as evidenced by that industry’s place in the bottom left of the graph below.

The reason for the difference between the Accenture and PwC findings is not immediately clear, but it’s worth noting that the two used different datasets:. PwC focused on CDP disclosures, while Accenture looked at the largest 2,000 companies by revenue. 

Suppliers step up

One theory of how to spur decarbonization is getting large companies to lead by setting emission targets then encouraging suppliers, many of which are smaller, to follow suit. This appears to be working. In 2020, just under 500 companies set targets, covering around 2.7 billion tons of CO2 equivalent. By 2024, the number of new target setters had surged to almost 1,300. Though the goals covered around 1.1 billion tCO2e, the median annual revenue of target setters fell from $3.8 billion to $1.3 billion.

“The larger companies are encouraging their suppliers, those suppliers are setting targets and creating a ripple effect,“ said Linich. The result was one of the most encouraging highlights of the data, he added. “The reason companies are acting has less to do with factors like regulatory or political reasons and much more to do with business value: My customers are asking for this, and I’m starting to prioritize it more as an organization, because they care.”

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The general business, sustainability, and DEI landscapes are increasingly tense, and in times like these, it’s not uncommon to instinctually choose from three basic responses: fight, flight, or play dead.

Some sustainability leaders and their companies will fight. They see climate change and DEI as core to their values, existential risks, or sources of value worth addressing.  Others will take flight, sometimes because they never really understood the value of sustainability. As a result, CSOs and their teams have lost their jobs and commitments have been rescinded. While most of us will agree this is a shortsighted mistake, it’s not hard to understand why business leaders are afraid.

And then there’s the most common response: playing dead, which amounts to continuing the work but going quiet, especially externally, to avoid attracting undue attention and risk offending stakeholders or facing a backlash. This approach can make a lot of sense given the shifting ground, and predictability—the most valuable asset in the business world—is scarce.

All of these responses are rational. The question becomes which path to choose? Below are three steps for making the business case of sustainability and moving beyond basic instinct.

Find the tangible value

Leaders feel pressure every day to deliver outcomes. They must stand in front of their investors quarterly and reveal progress and setbacks related to profit, loss, revenue, cost control, market share and brand strength. A small, but growing number of leaders may include carbon emissions, water usage, and the odd social metric. However, profitability indicators reign supreme. So how do we help CEOs and boards navigate this moment in the context of their priority outcomes?     

Instead of focusing on our commonly called upon force multipliers – regulation, supply chain engagement, reporting and policy advocacy – we need to return to fundamentals and recognize that sustainability programs deliver tangible value and our job as practitioners is to find and support that value creation. Our research has found companies that apply environmental sustainability concepts save millions of dollars in production costs and reach sales targets that support low emission energy, lower water use, and more circular approaches. Companies have boosted sales by featuring resource traceability that assured consumers that workers in the product’s supply chain were treated fairly. 

We need our version of the “it’s the economy, stupid,” which is the business case. This means advancing the CSO as a strategic business partner who harnesses sustainability as a source of competitive advantage, brand differentiation and operational efficiency.

This isn’t about surrendering principles or becoming captive to corporate inertia. Rather, it means deeply engaging with the machinery and relationships that drive organizational decision-making. This approach doesn’t limit others; sometimes the short term business case is not there, and it’s still time to fight.

Identify competitive differentiation 

To get the calculus right requires identifying strategic intersections where sustainability initiatives simultaneously advance business objectives and societal outcomes — positioning sustainability as a source of competitive differentiation and value creation. It means managing tensions and understanding the archetypes of sustainability value creation.  

We need not view the business case as sacrificing true commitments to environmental and social impact. To the contrary, for years major architects of the ESG and sustainability movement have tried to get companies to spend “real money” on environment and social outcomes. Linking sustainability more directly to the profit engine will better persuade leaders to direct more capex and opex to sustainability than regulation and reporting can. As our “How to Set Sustainability Strategy in 2025” report discusses, companies have become crafty at managing regulatory and reporting workarounds.

Mix art and science

Of course, managing competing interests and tensions is not easy, and every day seems more of a tightrope act. But we have more going for us than we might think. While many have lamented the rise of reporting requirements, these have actually given us much better data upon which to base our decisions and make our case. Creative business leaders can use this data to see which programs are driving value and which aren’t

Sustainability has too long been like the famous saying about advertising where we know that half of it drives value – we just don’t know which half. Data-driven business cases solve this challenge. Discussions about sustainability-advantaged hurdle rates for investments — given their high rate of success compared to other riskier alternatives — are far more common than they once were. Marginal abatement cost curves are making a comeback in the presentations of sustainability teams. There will always be an art to creating the business case, but data provides a much more scientific foundation upon which to build.

The tension resulting from integration efforts makes the sustainability profession challenging. It’s relatively simple to critique from the sidelines, questioning why executives don’t prioritize long-term thinking. It’s far more challenging to earn a seat at the decision-making table, navigate complex trade-offs, occasionally accept suboptimal outcomes, and persistently work to advance sustainability as a driver of commercial success and societal progress. But that is, as they say, the job.

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More than half of Salesforce’s most strategic suppliers — based on the amount the $38 billion software company spends on goods and services — have agreed to cut their greenhouse gas emissions as part of binding provisions in their contracts.

Those clauses are part of the Salesforce Sustainability Exhibit, introduced four years ago, in May 2021, as an amendment to the company’s standard contact language.

Among other things, the exhibit requires Salesforce business partners to set science-based emissions reduction targets within two years of signing, figure out the amount attributable to doing business with Salesforce and come up with a plan to deliver those goods or services in a carbon-neutral way. The contract calls upon suppliers to invest in some sort of remedy — such as investing in renewable energy or planting trees — if it can’t deliver emissions cuts.

The initiative is part of Salesforce’s high-level pledge to cut the carbon footprint of its supply chain in half by FY2031. The company has committed to an absolute reduction of 50 percent for all emissions by 2030.

“These are the things that we need from our suppliers in order for us to be able to make progress against these commitments,” said Louisa McGuirk, sustainable procurement director at Salesforce.

One-on-one interactions overcome reluctance

Salesforce prioritized its biggest contractors during renewals to introduce the Sustainability Exhibit, with procurement managers reaching out personally to explain the rationale behind the change, address potential objections and come up with ways to address them. Common themes:

  • Many suppliers needed their legal teams to review the exhibit paperwork because it was novel.
  • Some companies had no sustainability strategy in place and the concept of setting emissions reduction goals was completely new.
  • Most suppliers needed buy-in at the leadership level.
  • Others were concerned about the costs associated with creating, measuring and managing an emissions reduction target.

Along the way, Salesforce adjusted certain requirements; for example, instead of setting a specific year by which all suppliers needed to come up with their strategy, it adjusted the deadlines to accommodate individual business needs. “We do an annual review and make sure things still align,” McGuirk said.

The company also created a net-zero toolkit outlining the process of setting commitments. And it offered coaching to smaller companies to help them come up to speed on core concepts related to emissions reductions and guide them through the process of creating an initial greenhouse gas inventory. Salesforce also helps cover the costs of submitting data to EcoVadis, which tracks disclosures.

Compliance as a business differentiator

Visions Management, a small, woman-owned firm that handles facilities management, knew little about net zero before it was approached by Salesforce. “When the contract was first presented, I was overwhelmed,” said Visions founder and CEO Amy Garber. “I didn’t know what it all meant. I was afraid of failure.”

Positive reaction from Visions’ employees convinced the company to make the push. It received coaching from Salesforce to assist with the transition and used interns from a local high school to gather data and research viable options for purchasing carbon credits. 

Visions had its science-based targets for emission reductions approved by the Science Based Targets initiative in early 2025. It discusses that status with current and prospective customers. “I feel like we have won deals because of this. It’s another piece that adds to the value of our services,” Garber said.   

Procurement as an adoption driver

Adoption of the Sustainability Exhibit as a percentage of the Salesforce’s spending with outside suppliers will slow on an annual basis, McGuirk said, because it started with its biggest contractors.

The reason Salesforce targeted contractors by spending — rather than on their emissions — was because progress was easier to track using existing carbon accounting methods, she said.

“We’ve heard from a handful of suppliers that without Salesforce’s nudge, or the Exhibit, that they wouldn’t have set targets or it would have taken a lot longer to set those targets,” McGuirk said.

Many large companies actively encourage suppliers to reduce emissions through science-based targets — and some even offer educational resources and technical assistance to help — but Salesforce remains unique in codifying those commitments as part of its procurement process, according to sustainability consultants. That said, software maker Zendesk, itself a Salesforce supplier, introduced a similar set of contract clauses in December. 

Salesforce’s adoption numbers are impressive, considering how long it can take to train corporate procurement teams to have these conversations and the reluctance to alienate key suppliers, said Emily Damon, chief growth officer at consulting firm ClimeCo. “If it comes from your sustainability team, it’s cute. If it comes from procurement, it is serious.”

A benefit of these programs is that help large companies gather more specific metrics surrounding the full extent of their Scope 3 emissions, getting more accurate data than the estimates they are typically forced to use, said Cooper Wechkin, founder and CEO at RyeStrategy, which is coaching some of Salesforce’s suppliers.

Best practices

According to the experts consulted for this story, companies interested in shaping programs similar to that of Salesforce should:

  • Involve procurement teams. They can help prioritize engagement and signal which suppliers might find new requirements difficult to meet.
  • Provide technical support. Many companies, especially smaller ones, will need to be educated on the concept of net zero.
  • Offer options. Allow suppliers to choose the emissions reduction path that makes the most sense for their business rather than dictating a one-size-fits all approach. 
  • Look for ways to support supplier investments. For example, a corporation could motivate supplier investments in renewable energy or lower-emissions materials through better procurement terms. “This is where you’ll start to see a lot more pull-through with companies that are more slow-moving,” Wechkin said.

The post Salesforce got key suppliers to promise emissions cuts. Here’s how appeared first on Trellis.

The European Union is scaling back its landmark CSRD corporate climate disclosure law, while the SEC recently stopped defending in court its corporate emissions disclosure law. But as a result of existing and on-the-way state-level laws, companies will have to keep moving forward with plans to monitor and report Scope 1, 2 and 3 emissions.

Here is a list of states that already have laws mandating corporate emissions disclosure or have introduced such bills. Trellis will continue to update it in real time as new laws come on line.

States with laws

California

SB 253 Climate Corporate Data Accountability Act

Who it affects: Any company, public or private, that does business in the state with revenues exceeding $1 billion.

What will be reported and when: Scope 1 and 2 emissions based on 2025 data, due in 2026; Scope 3 disclosures, from downstream and upstream value chains, due in 2027.

SB 261 Climate-Related Financial Risk Act

Who it affects: Companies with $500 million or more in annual revenue.

What will be reported and when: Financial risks directly caused by climate change, along with mitigation plans that address those risks, due January 2026, then biennially thereafter.

States considering laws

Colorado

Greenhouse Gas Emissions Act HB 25-1119

Status: Introduced Jan. 28.

Who will it affect: Companies — including subsidiaries — operating in the state with revenues exceeding $1 billion.

What will be reported and when: Scope 1 and 2 emissions, beginning in 2028, then annually thereafter; Scope 3 emissions, with partial disclosure for purchased, capital goods and product expected in 2029, with categories added in 2030 and 2031. Includes an option for refraining from disclosing certain items based on freedom of speech considerations.

Illinois

Climate Corporate Accountability Act HB 3673

Status: Introduced Feb. 18.

Who will it affect: U.S. businesses operating in the state with revenues exceeding $1 billion.

What will be reported and when: Scope 1, 2 and 3 emissions, due Jan. 1, 2027, then annually thereafter. Emissions will be calculated using the GHG Protocol Corporate Accounting and Reporting Standard. State verified third party auditors would be required to independently verify the reports.

New Jersey

Climate Corporate Data Accountability Act SB 4117

Status: Introduced Feb 3.

Who will it affect: U.S. entities doing business in the state with revenues exceeding $1 billion.

What will be reported and when: Three years after the law is enacted companies will submit a report on GHG emissions to the Department of Environmental Protection (DEP) and a non-profit chosen by DEP, with annual reports thereafter. Scope 1 and 2 emissions must be publicly accessible four years after enactment; five years for Scope 3. Additionally, a qualified third party auditor must verify an assurance engagement report at a limited assurance level, with a planned move to reasonable assurance eight years after enactment.

New York

Climate Corporate Accountability Act SB 3456

Status: Introduced Jan. 27, following a failed first attempt in 2023.

Who will it affect: Companies operating in the state with revenues exceeding $1 billion.

What will be reported and when: Scope 1 and 2 emissions, beginning in 2027, then annually thereafter; Scope 3 emissions, beginning in 2028, then annually thereafter. Companies must submit reports in accordance with the GFG Protocol Corporate Account and Reporting Standard and GHG Protocol Value Chain Accounting and Reporting Standard. The final report must be verified by a third party auditor at limited assurance, with a planned move to reasonable assurance in 2031.

Washington

Washington Fashion Sustainability Accountability Act HB 1107

Status: Introduced Dec. 20, after a similar bill failed to make it out of committee earlier in the year.

Who will it affect: All fashion producers —anyone selling, offering or distributing apparel or footwear — in the state.

What will be reported and when:

All companies will report:

  • Products containing high priority chemicals
  • Definition of marketing terms, including “sustainable,” “green,” “low impact” and “environmentally friendly”
  • Disposal methods and volume of unwanted excess products not sold in store
  • Current initiatives and targets set to reduce environmental impacts

Companies with a gross income of $100 million or more will also report:

  • Established environmental due diligence policies and outcomes
  • Working conditions of company and its direct suppliers.

The post These states are picking up the corporate climate disclosures slack appeared first on Trellis.

Proposed new guidelines from the Science Based Targets Initiative (SBTi) include a significant overhaul of the system for setting and hitting Scope 3 emissions targets, one of the thorniest challenges faced by sustainability teams. 

The SBTi’s current net-zero standard requires Scope 3 to be treated in much the same way as Scopes 1 and 2: Companies must measure the emissions associated with each and begin to reduce them at a rate that puts them in line with the global goal of limiting warming to 1.5 degrees Celsius. The approach has frustrated many companies, partly because they often have limited visibility into supply chains and, as a result, struggle to measure — let alone mitigate —the emissions generated within them.

The updated standard, released earlier this week, outlined a different way of doing things. Rather than treat Scope 3 emissions as a single entity, the SBTi proposed that companies set separate targets for the value-chain activities — procurement of concrete or business travel, for example — that generate the most emissions. 

Flexible mechanisms

Crucially, the SBTi also offered a tentative blessing to an emerging emission-reducing mechanism: indirect mitigation, also known as value-chain intervention or insetting. With this method, companies help fund decarbonization projects of suppliers, such as paying farmers to use regenerative agriculture methods, and earn credits that count against Scope 3 totals. Because confirming a link with a specific supplier in a complex chain is often challenging, companies can also earn credit for interventions that take place within a “supply shed” — a group of suppliers, usually in the same region, that provides similar goods.

Take the example of a company trying to reduce emissions from steel procurement. It may have funds available for the purpose, but can’t identify the facilities that produce the steel it uses because they are too far back in the supply chain. “Many companies have Scope 3 in their accounts but don’t know who the emitter is,” said an experienced sustainability consultant who asked not to be named because he works with clients on Scope 3 matters. “If I give you an instrument to invest in mitigation, I’m expanding your options.”

Domino effect

Allowing supply-shed methods is a “very positive” step, added Patrick Flynn, founder of Switchboard, a climate consultancy. Flynn is a former global head of sustainability at Salesforce, where he helped introduce the Sustainability Exhibit, contract language that included a requirement that direct suppliers set science-based targets. While impactful, Flynn noted that this “domino” strategy, in which your supplier is supposed to pressure their suppliers to decarbonize, takes time and is less effective as you travel further back in the supply chain. Indirect mitigation, said Flynn, allows companies to move quicker.

The SBTi is now soliciting feedback through an online survey, until June 1. One issue to look for in future drafts is additional detail on the accounting rules for indirect mitigation. These rules will need to strike a balance between giving companies the flexibility to invest across a supply shed with the need to keep funding targeted to a specific Scope 3 emission. Without such a restriction, investments may end up flowing to cheaper projects that don’t help decarbonize the target activity.

The SBTi won’t have to start from scratch to craft these rules. Earlier this year, the Advanced and Indirect Mitigation Platform, which is being tested by Amazon and others, began a pilot of cross-sector guidelines for accounting for value-chain interventions. SustainCERT, a company that verifies carbon projects, now has over 30 interventions listed on its registry

These advances, together with feedback from companies that are struggling with Scope 3, likely motivated the SBTi’s proposed changes, suggested Sarah Leugers, chief growth officer at Gold Standard, a standards body for climate and development projects. “They’re seeing those tools emerge while also seeing how difficult it is to influence suppliers,” she said. “So they are creating flexibility.”

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As the Trump administration wages a multi-front attack on federal environmental policies, Seventh Generation is stepping up its advocacy and defense of state laws that require polluters to pay for the negative impacts of climate change.

The cleaning products company, known for its bio-based formulations, was a prominent supporter of Vermont’s Climate Superfund Act, which became law in May 2024. Prior to the passage, the Burlington-based company joined 60 local businesses, including Ben & Jerry’s, to support the bill by meeting lawmakers and through grassroots outreach designed to build public awareness.

Seventh Generation was also part of a business group that worked for more than a year to get similar legislation passed in New York in December 2024. Now, the company is focusing on California, where lawmakers have revived a climate superfund bill that failed to pass last year, while staying abreast of similar bills in Maryland, Massachusetts, New Jersey and Oregon.

“Some of the most ambitious and just policies on climate have been advancing at the state level,” said Kate Ogden, head of advocacy and movement building at Seventh Generation, a subsidiary of Unilever. “We can have the greatest impact there.” 

Make policy advocacy an integral piece of climate strategy

Ashley Orgain, chief impact officer at Seventh Generation, said all businesses with net-zero goals should step forward so legislators receive a more balanced point of view on climate and clean energy laws. She noted that fossil fuels companies aiming to kill such legislation tend to dominate the dialogue and lobbying efforts.

The consumer products company has been a vocal proponent of climate and clean energy policies since it was founded in 1988, so aggressive advocacy doesn’t require special approval from leadership. Parent company Unilever is also known for making its voice heard on climate issues and for cutting ties with trade associations that don’t support its positions.

But the need for companies to advocate for climate regulations has become more urgent as global temperatures rise and federal leadership falters, Orgain said. Setting emissions reductions targets isn’t enough.

“We know we’re not going to be making a meaningful difference by our ingredients selection or packaging selection alone,” she said. “That will not get us to the pace and scale we need.”

Understand the superfund agenda

Climate superfund laws hold businesses accountable for the toll climate change takes on communities by assessing fees related to a company’s greenhouse gas emissions. New York’s law, for example, requires fossil fuels companies and heavy emitters to fund new infrastructure meant to protect the state from the effects of climate change.

Vermont’s law works in a similar way to cover the clean-up of climate related disasters, such as devastating floods that caused close to $500 million in damage claims in 2023. 

“This bill would ensure that the biggest historic polluters in the state — the companies that have known for almost 50 years that their products were destabilizing the planet we live on — that those companies pay their fair share of the costs inflicted on our state by the climate crisis,” said Seventh Generation’s Ogden at a February 2024 event organized to support the law.

The Vermont law was challenged as unconstitutional in December 2024 by the U.S. Chamber of Commerce and faces resistance by the state’s Republican governor, who is emboldened by Trump’s agenda. Likewise, a group including 22 states and industry associations has sued to stop the New York version.

Team up with community-centered policy experts

Both Orgain and Ogden are actively involved with Vermont policy and politics, through relationships with the Vermont Businesses for Social Responsibility and Vermont Public Interest Group. That’s important for face-to-face and grassroots engagement. 

“Building public support is super constructive, and having a company lobby for bills such as these goes a long way,” said Deborah McNamara, executive director of nonprofit ClimateVoice, which works with corporations on policy issues. “Companies are inherently involved with public policy, whether they like it or not. They are either obstructing consciously, keeping themselves on the sidelines or stepping out as leaders.”

Seventh Generation’s media budget for these sorts of activities is modest — much of its work is volunteer-driven — but when it does run ads it teams up with other companies and focuses on high-profile activities or comments suggested by organizers with lobbying expertise and strong community contacts. 

“We are in a very small state that is leading on this work, and we answer the call when they ask us to show up,” Ogden said.

In New York, Seventh Generation became involved through NY Renews, a coalition of 380 environmental-justice and community groups. Getting businesses involved with the effort lent NY Renews more credibility, said Stephan Edel, executive director of the organization.

“Businesses are often siloed off, but being in tight communication makes everyone’s advocacy more effective,” Edel said. “The challenge becomes making sure that we are coordinated and aligned.”

Prepare a compelling offense — and defense

Seventh Generation views collective action as crucial in the fight to protect the New York and Vermont laws and to craft a unified message in support of new legislation. That’s one reason the company is building a business coalition to engage lawmakers on the new California legislation introduced in late February. 

“Fossil fuels companies have a common narrative — pitting environmental concerns against affordability,” Ogden said. “It’s necessary for other businesses to fight against that message.”   

In California, the burden of disasters on taxpayers — particularly wildfires — will fuel a firestorm of debate over SB 684 and AB 1243, dubbed the “Polluters Pay Climate Superfund Act of 2025.” Affordability is a conversation in every statehouse, Ogden said.

The bills’ sponsors point to a potential burden of $250 billion related to the January fires in Los Angeles as justification, underscoring the “financial injustices” of requiring California residents to pay for the damage. It also plays to health concerns. The legislation would charge oil and gas companies a fee proportional to their emissions in the state since 1990. 

“We know we cannot make progress until we rein in the influence of the oil and gas industry,” Ogden said. “This is a way to have a huge impact on the climate without putting you head to head with the current presidential administration.”

The post Inside Seventh Generation’s playbook for supporting polluter-pay laws appeared first on Trellis.

The White House’s tariff seesaw is disrupting global supply chains and planning for many businesses. However, it’s also benefiting companies that don’t manufacture overseas, or at all. Tariffs are poised to boost the market for secondhand apparel, which is booming for the second year in a row, according to ThredUp’s annual Resale Report.

Amid the uncertainty over tariffs, most apparel executives are navigating procurement disruptions and eyeing resale as a steady source of goods, while a majority of consumers plan to increase their secondhand shopping, the March 18 report found in recent surveys. In addition, the secondhand fashion market is seeing the strongest growth since 2021.

“You compare it to how retail is struggling to grow, and then you add on the tariffs and the uncertainty of these supply chains that all these retailers are dealing with, and it’s almost flipping that story on its head,” said ThredUp’s Chief Strategy Officer and General Counsel Alon Rotem. “Resale is actually in the strongest position it’s ever been in right now.”

Not only is the resale market insulated from global supply chain shocks, it may benefit from them, Rotem noted. And if retailers pass costs onto consumers, secondhand offers a less expensive entry into premium brands, such as Vuori, Lululemon and Reformation, which sell well secondhand.

‘Stable and predictable’ secondhand

Since returning to office Jan. 20, President Donald Trump has layered 20 percent tariffs onto goods from China, the world’s largest fashion exporter. That came atop existing tariffs of up to 25 percent.

Fast fashion giants, such as Shein and Temu, have been bracing for Washington to act on its promise close the de minimis loophole on imports under $800. Although that exemption remains for now, tariffs are already reshaping the apparel market, according to ThredUp’s surveys in January and February of 3,034 American consumers and 50 retailers and brands.

Among retail and brand executives in apparel, ThredUp found:

  • Eighty percent expect the trade wars to disrupt their supply chains.
  • Fifty-four percent saw resale as a “stable and predictable source of clothing” as tariffs potentially change.
  • Forty-four percent of execs reported seeking ways to user fewer imports.
  • Seventy-six percent of those not involved in branded resale already are looking to get involved.

The overall retail market offers clues that the recent tariffs may be dampening longer-term growth. Tariffs pushed U.S. retail spending to drop from January to February, according to the National Retail Federation. However, sales overall rose by 4.4 percent overall in the year’s first two months, compared with the same period in 2024.

Steve Preston, president and CEO of Goodwill Industries International in Rockville, Maryland, in February said he is closely eyeing the trade policies before determining benefits or drawbacks for the nonprofit. “It’s very hard to call right now, because we don’t know where it’s going to end up,” he told Trellis. “Now there is no doubt that if clothing or other goods go up, if prices go up, our value proposition will be greater. There’s no doubt about that.”

Apparel shoppers are highly motivated to find pre-worn bargains if prices soar, according to ThredUp:

  • Sixty-two percent of Americans worry that tariffs will drive up prices for fashion.
  • Fifty-nine percent of consumers said they will seek secondhand items and other less-expensive options if apparel prices rise.
  • That was even more true for millennials, at 69 percent.
  • Among younger adults, 48 percent reported that they already shop for resale before new apparel. That’s up by 7 percent from 2022.

Secondhand growth was already aggressive during the administration of President Joe Biden, ThredUp’s resale report found:

  • The value of sales of used apparel grew 14 percent in 2024, which is five times faster than retail overall. The market will grow by 9 percent each year to reach $74 billion in 2029.
  • Online sales of preworn clothes and shoes made up 88 percent of resale spending and grew eight times faster than apparel retail overall.
  • Globally, secondhand rose by 15 percent in 2024, and it will rise by 10 percent annually to reach $367 billion by 2029.

Ups and downs for resellers

ThredUp, based in Oakland, California, sells thousands of women’s and children’s apparel brands on its platform. The public company has struggled with profitability in its 16 years. On March 3 it reported revenues of $260 million, with growth of 1 percent for 2024 over 2023. Its stock was trading at $2.22 on March 18, a fraction of its peak of $27.27 in June 2021.

Nevertheless, the business insists on a bright future for resale. “It’s as profitable as it’s ever been, and it has a credible growth path as well,” Rotem said. “And so we’re really bullish on the future.” He noted, for example, that resale startup Vinted, based in Vilnius, Lithuania, is turning profits. And San Francisco’s The RealReal has reported strong earnings in recent quarters.

Eighty-six percent of retail executives told ThredUp that customer desire for used apparel has either grown or stayed steady in the past three years, according to ThredUp’s report.

Retailers and brands should seize the moment to take a fresh look at resale beyond clothes and shoes, according to Rotem. For instance, marketplaces are thriving, formally and otherwise, for used furniture, baby gear, electronics and sporting goods.

Even as the volatile policy environment leaves many short-term questions unanswered for apparel businesses, Rotem advised other corporate sustainability executives to hold tight to their long-term goals.

An era is ending of broader federal support for corporate sustainability to be baked into rules, regulations and policies. However, the pendulum is likely to swing in another direction at some point, according to Rotem. “Just because it doesn’t matter so much to the government doesn’t mean those things still don’t matter to consumers,” he said of corporate adherence to sustainability and human rights principles. “It’s just more incumbent on the brands to make sure that consumers are aware of these things and can differentiate their choices.”

[Gain insights to move beyond incremental action and accelerate the shift to a circular economy at Circularity, April 29-May 1, Denver, CO.]

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