What Five Years on the Road to Net-Zero Has Taught Us

Current climate targets fall short of Paris goals

The world stands off track. More than a decade after 196 nations signed the Paris Agreement, global efforts remain insufficient to prevent temperatures rising beyond 1.5°C above pre-industrial levels. Recent analysis confirms that current commitments will lead to a temporary temperature overshoot before 2035, regardless of policy adjustments made today.

This reality emerged clearly in early 2025 when Dr. James Robey, Capgemini’s global head of environmental sustainability, reviewed progress since the landmark 2015 accord. His assessment highlighted a persistent gap between pledges and implementation. Meanwhile, the United Nations Environment Programme confirmed what climate scientists had warned: the 1.5°C threshold will be breached within the next decade.

For UK businesses, particularly small and medium enterprises, these findings carry immediate consequences. Compliance requirements continue tightening. Supply chain expectations are shifting. Public sector tender criteria now regularly incorporate net-zero commitments. Understanding where global climate policy stands helps businesses plan for regulatory changes, investment decisions, and competitive positioning in a carbon-constrained economy.

What the Paris Agreement established and how it works

Adopted on 12 December 2015, the Paris Agreement brought 194 countries together around a common goal: limit global temperature rise to well below 2°C above pre-industrial levels, while pursuing efforts to restrict warming to 1.5°C. The agreement entered into force on 4 November 2016. Unlike previous climate treaties, it operates through voluntary national pledges rather than binding targets.

Each participating country submits Nationally Determined Contributions, known as NDCs, which outline specific emissions reduction commitments. These pledges are updated every five years, creating a ratchet mechanism intended to increase ambition over time. The system relies on transparency and peer pressure rather than legal enforcement.

To achieve the 1.5°C goal, global greenhouse gas emissions must peak by 2025. Subsequently, they need to fall by roughly 43% by 2030 compared to 2019 levels, then by 60% by 2035. Carbon dioxide emissions must reach net zero around 2050. These benchmarks come from the Intergovernmental Panel on Climate Change and form the foundation of current climate policy.

The agreement’s rulebook was finalized at COP26 in Glasgow during 2021. This included frameworks for transparency, carbon markets under Article 6, adaptation financing, and loss and damage provisions. However, progress implementing these mechanisms has been slower than anticipated. Consequently, the gap between what countries have pledged and what science requires continues to widen.

Where emissions targets stand after the latest national pledges

The third round of NDCs, submitted by September 2025, revealed stark shortfalls. Current commitments project only a 12% to 15% reduction in global emissions by 2035 compared to 2019 levels. This falls dramatically short of the 55% reduction scientists say is necessary to maintain a reasonable chance of limiting warming to 1.5°C.

Analysis of these updated pledges shows three distinct warming pathways. Under current policies actually being implemented, the world faces 2.8°C of warming with 66% probability. If countries fully deliver their unconditional NDCs, warming drops to 2.5°C. Even in the most optimistic scenario, where all conditional NDCs are met and net-zero pledges are honoured, warming would likely reach 1.9°C with a 66% chance of staying below 2.1°C.

Major economies show varied ambition levels. China’s latest NDC targets a 7% to 10% emissions reduction by 2035 from an anticipated peak. However, alignment with 1.5°C pathways would require cuts exceeding 50% from 2023 levels. The European Union faces similar challenges. Meeting its 2030 targets demands nearly doubling the rate of reductions achieved since Paris. Several member states, including Italy, Poland, Spain, and Belgium, lag particularly far behind required trajectories.

This creates an emissions gap of approximately 20 to 23 gigatonnes of CO2 equivalent by 2030. Researchers estimate that one-third of this gap could be closed through full implementation of existing pledges. Nevertheless, two-thirds remains unaddressed even under best-case scenarios. As a result, the United Nations Environment Programme now considers a 1.5°C breach before 2035 inevitable rather than preventable.

Why 2024 marked a critical turning point

The year 2024 recorded the first annual average temperature exceeding 1.5°C above pre-industrial levels. This milestone does not mean the Paris target has been permanently breached. The agreement refers to long-term warming trends measured over decades. However, it signals entry into what scientists expect will be a 20-year period of elevated temperatures.

This temporary overshoot was formally acknowledged at COP30 in Belém, Brazil, during 2025. Negotiators from vulnerable nations pushed for recognition that limiting warming to 1.5°C now requires massive deployment of negative emissions technologies. These systems actively remove carbon dioxide from the atmosphere. Currently, only Denmark has adopted a national negative emissions target, aiming for 110% reduction from 1990 levels by 2050.

The scale of required carbon dioxide removal remains unprecedented. Benchmark scenarios limit bioenergy with carbon capture and storage to approximately 5 gigatonnes annually by 2050. This represents an upper bound based on land availability and competing food production needs. Therefore, additional removal methods including direct air capture, enhanced weathering, and ocean-based approaches must scale significantly. None of these technologies currently operate at gigatonne scale.

Former IPCC chair Robert Watson stated bluntly in 2024 that climate policy has failed. His assessment noted that ten years of insufficient action have pushed multiple Earth systems toward tipping points. While some criticize this as overly pessimistic, the sentiment reflects growing frustration within the scientific community. Meanwhile, Climate Action Tracker reported that both current policies and national pledges remain well above emissions pathways consistent with Paris Agreement goals.

Commercial consequences for UK businesses navigating tightening requirements

This global policy context directly shapes the operating environment for British companies. First, regulatory requirements continue to multiply and strengthen. The UK government has committed to cutting emissions by 68% below 1990 levels by 2030 and achieving net zero by 2050. These targets drive compliance obligations for carbon reporting, energy efficiency standards, and sector-specific regulations.

Public sector procurement exemplifies how national climate commitments translate into business requirements. Procurement Policy Note 0606 requires suppliers bidding for contracts above £5 million to publish a carbon reduction plan. This plan must demonstrate commitment to net zero by 2050 and outline measurable emissions reductions. For many SMEs, meeting this threshold determines access to significant revenue streams. Consequently, businesses without credible decarbonisation strategies face exclusion from public sector opportunities.

Supply chain pressures are intensifying in parallel. Large corporations implementing their own net-zero commitments increasingly audit and set requirements for suppliers. This cascades down supply chains, eventually reaching small and medium enterprises. Manufacturing firms supplying automotive, aerospace, or construction sectors report growing demands to quantify and reduce product carbon footprints. Companies unable to provide this data risk losing contracts to competitors who can.

Financial institutions are also adjusting risk assessments based on climate factors. Banks consider transition risk when evaluating loan applications. Insurance premiums reflect physical climate risks more explicitly. Investment funds apply ESG criteria that incorporate carbon performance. Therefore, businesses with weak climate strategies may face higher capital costs or reduced access to financing.

The shift away from fossil fuels affects energy procurement strategies. While renewable electricity costs have fallen substantially, grid constraints and intermittency create planning challenges. Companies must balance cost management with carbon reduction goals. Furthermore, the phasing out of gas boilers and petrol vehicles creates both transition costs and business opportunities, depending on sector exposure.

Adaptation requirements add another layer of complexity. As global temperatures rise beyond 1.5°C, physical climate impacts intensify. Businesses face increased risks from flooding, heat stress, water scarcity, and supply chain disruptions. Insurance may become unavailable or unaffordable for certain locations or activities. Consequently, operational resilience planning must now incorporate climate scenarios that previous risk assessments did not consider.

Essential facts about climate progress and projections

• The Paris Agreement requires global emissions to peak by 2025, then fall 43% by 2030 and 60% by 2035 from 2019 levels to limit warming to 1.5°C with limited overshoot.
• Current national policies would lead to 2.8°C warming by 2100, while full delivery of existing unconditional pledges would result in 2.5°C warming.
• Even if all conditional pledges and net-zero commitments are met, warming would likely reach 1.9°C with a 66% chance of remaining below 2.1°C.
• The year 2024 recorded the first annual average temperature exceeding 1.5°C above pre-industrial levels, signaling the start of an expected 20-year elevated warming period.
• There is currently a 20 to 23 gigatonne CO2 equivalent gap between national pledges and required emissions in 2030, with only one-third potentially closable through full pledge implementation.
• Achieving net zero by 2050 requires removing billions of tonnes of CO2 from the atmosphere annually using technologies that do not yet operate at necessary scale.
• Only Denmark has adopted a national negative emissions target, aiming for 110% reduction from 1990 levels by 2050 to compensate for hard-to-abate sectors.

What businesses should consider in response to shifting climate policy

The trajectory of global climate policy points toward continued regulatory tightening, regardless of short-term political fluctuations. Businesses should therefore treat net-zero transition as an operational imperative rather than a voluntary initiative. This starts with understanding current emissions across all three scopes. Scope 1 covers direct emissions from owned sources. Scope 2 includes purchased electricity, heat, and steam. Scope 3 encompasses the supply chain and product use, often representing the largest portion.

Many SMEs find Scope 3 emissions particularly challenging to quantify. However, this category increasingly features in customer questionnaires and procurement requirements. Consequently, developing methods to estimate and eventually measure supply chain emissions creates competitive advantage. Our net-zero program helps businesses establish carbon reporting systems that meet current and anticipated compliance standards.

Setting credible reduction targets requires care. The Science Based Targets initiative provides frameworks aligned with climate science. However, some companies have recently scaled back commitments after discovering implementation challenges. Therefore, targets should be ambitious yet achievable, backed by specific action plans rather than vague aspirations. Moreover, they should address both operational emissions and supply chain impacts.

Investment in energy efficiency typically offers the quickest return. Upgrading building insulation, installing LED lighting, and optimizing heating and cooling systems reduce both carbon emissions and energy costs. Additionally, these improvements often qualify for government grants or tax incentives. For example, the Energy Technology List provides enhanced capital allowances for qualifying equipment.

Transport represents another significant emissions source for many businesses. Transitioning vehicle fleets to electric alternatives has become increasingly viable as charging infrastructure expands and vehicle ranges improve. Nevertheless, this requires planning around operational needs, charging logistics, and capital budgets. Businesses should model total cost of ownership over vehicle lifetimes rather than focusing solely on purchase prices.

Procurement decisions carry growing importance as supply chain emissions face greater scrutiny. Developing relationships with suppliers who can demonstrate carbon reduction creates resilience against future regulatory requirements. Furthermore, it positions businesses to respond quickly when customers demand supply chain transparency. Sustainable procurement practices help identify lower-carbon alternatives while managing cost and quality considerations.

Employee engagement should not be overlooked. Staff often generate ideas for efficiency improvements and behavior changes that reduce emissions at minimal cost. Training programs help teams understand why climate action matters for business continuity and how individual roles contribute to organizational goals. Therefore, embedding sustainability into company culture supports long-term success rather than treating it as a separate initiative.

Looking ahead, businesses should monitor policy developments at UK and international levels. The government’s Carbon Border Adjustment Mechanism proposal, extended producer responsibility schemes, and sector-specific regulations will all affect compliance requirements. Staying informed allows businesses to plan investments and adjust strategies proactively rather than scrambling to meet new mandates at the last minute.

Further reading

The United Nations Framework Convention on Climate Change maintains comprehensive information about the Paris Agreement, including country commitments, meeting outcomes, and technical guidance documents. This represents the primary source for understanding international climate policy.

The UN Environment Programme’s annual Emissions Gap Report provides detailed analysis of how national pledges compare to required reductions. The report includes country-specific assessments and sector breakdowns. It offers the most authoritative assessment of global climate progress published each year.

For UK-specific policy and requirements, the Department for Energy Security and Net Zero publishes strategies, regulations, and guidance documents. This includes details on procurement requirements, reporting obligations, and available support schemes. Businesses should bookmark this resource for regulatory updates.

The Climate Action Tracker offers independent scientific analysis evaluating countries’ climate commitments and actions. It rates national targets against Paris Agreement goals. The site provides accessible summaries alongside technical documentation, making complex climate science more approachable for business audiences.

Finally, the Science Based Targets initiative provides frameworks and validation for corporate climate goals. Resources include sector-specific guidance, calculation tools, and case studies. Companies considering formal emissions reduction commitments should review these materials to ensure targets align with climate science rather than arbitrary percentages.