Climate Goals Are Worth Setting—Even If They’re Aspirational

When corporations publicize their climate aspirations it can have major upstream impacts. Analyzing 5.6 million supply-chain contracts and 8,000 climate announcements from 2006–2023, a new study finds that when large customers set decarbonization goals, their suppliers significantly increase climate-related contracting—by roughly 5% relative to the mean—with additional gains after subsequent customer targets. Crucially, even imperfect or highly aspirational targets spur supplier investment and trigger industrywide spillovers, including from noncontracted suppliers anticipating future demand. To realize the biggest impact, executives should treat climate targets as strategic procurement tools, act before plans are perfect, and coordinate targets across peers.

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