Inside Workday’s New Greenhouse Gas Reduction Targets
Workday has set a second round of science-based climate targets after completing its first commitment cycle. The enterprise software company is now pursuing absolute cuts to operational emissions and wider intensity-based reductions across its supply chain through to fiscal year 2031. The shift represents a move away from supplier engagement goals that proved difficult to meet and toward direct measurement of emissions from procurement, infrastructure and travel.
For businesses tracking climate performance in their own sectors, Workday's experience highlights three practical realities. First, renewable electricity matching is easier to deliver than absolute emissions cuts. Second, indirect emissions from suppliers remain the hardest category to control. Third, growth complicates decarbonisation when computing demand, headcount and facilities all expand at pace.
The new targets were validated by the Science Based Targets initiative in early 2025. They apply across three scopes of emissions and use fiscal year 2025 as the baseline for reduction commitments. Workday's approach is typical of a technology company whose climate footprint depends more on data centres, cloud services and purchased goods than on manufacturing or physical product distribution.
Workday's original climate commitments and how they performed
The first set of targets was approved by SBTi in 2022. All three commitments aligned with a 1.5°C warming pathway. They covered Workday's own operations, electricity use and supply chain activities through fiscal year 2026. The goals focused on renewable energy, business travel and supplier engagement rather than absolute operational cuts.
Specifically, the company committed to three outcomes. It would continue sourcing renewable electricity equivalent to 100% of consumption through fiscal year 2030. It would reduce absolute emissions from business travel by 25% by fiscal 2026, using fiscal 2020 as the baseline. Finally, it aimed to ensure that suppliers representing 70% of spending on purchased goods, services and capital goods adopted science-based targets by fiscal 2026.
Business travel delivered the clearest result. Emissions fell 31% against the fiscal 2020 baseline, exceeding the 25% target. The decline reflects both policy changes and the lasting effects of remote working patterns established during the pandemic. Travel remains a category where companies can impose controls relatively quickly through approval processes, budget allocations and hybrid working policies.
Renewable electricity matching also continued. Workday reported matching its electricity consumption with renewable sources for six consecutive fiscal years, covering both offices and data centres. However, this approach does not mean every facility runs on renewable power at all times. Instead, it typically involves purchasing renewable energy certificates or entering power purchase agreements that match annual consumption volumes.
The supplier engagement target was not met. By the end of fiscal year 2026, only 24% of relevant suppliers had set science-based targets. That figure was slightly below the previous year's level and well short of the 70% goal. The gap illustrates a recurring challenge: companies can set policies for their own operations more easily than they can compel independent suppliers to adopt comparable commitments.
The new targets validated by SBTi for fiscal year 2031
Workday's second round of commitments introduces absolute reduction requirements for the first time. The targets extend through fiscal year 2031 and use fiscal year 2025 as the baseline. They address operational emissions, electricity sourcing and major categories of indirect emissions through different mechanisms.
The Scope 1 commitment requires Workday to reduce absolute greenhouse gas emissions by 42% by fiscal 2031 from the fiscal 2025 baseline. Scope 1 covers direct emissions from sources the company owns or controls, such as fuel combustion in boilers, vehicles or backup generators. This is a harder test than renewable energy matching because it depends on reducing fuel use and improving efficiency across facilities.
For Scope 2, Workday will continue sourcing electricity equivalent to 100% of consumption from renewable sources annually through fiscal 2031. This extends the existing commitment rather than replacing it with an absolute reduction goal. Scope 2 covers indirect emissions from purchased electricity, and renewable matching has been the company's primary approach since fiscal year 2021.
The Scope 3 target represents the biggest structural change. Workday will reduce emissions from purchased goods and services, capital goods and business travel by 52% per dollar of economic activity by fiscal 2031 from the fiscal 2025 baseline. The target is intensity-based rather than absolute, which means emissions must decline relative to revenue or output even if total emissions rise as the business grows.
This new Scope 3 goal replaces the earlier supplier engagement target. Instead of measuring how many suppliers have adopted science-based targets, Workday will track actual emissions from procurement, capital investment and travel. The shift reflects a move toward outcome-based measurement, though the intensity metric creates flexibility for a company expecting continued growth.
Workday's emissions profile and infrastructure footprint
Workday reported total emissions of 335,490 metric tons of carbon dioxide equivalent in fiscal year 2026. Data centres and cloud infrastructure accounted for roughly one-third of that total. The figure underscores the importance of infrastructure decisions to the company's climate strategy, even though Workday is a software provider rather than a manufacturer.
Enterprise software depends on energy-intensive computing, data storage and cloud services. Consequently, emissions from digital infrastructure often rival or exceed those from office buildings and business travel. For Workday, that means decarbonisation depends as much on cloud provider choices and data centre efficiency as on renewable electricity contracts for head office locations.
The company has also expanded substantially in recent years. Workday now employs more than 19,500 people, operates offices in over 30 countries and serves more than 75 million users under contract. Growth at this scale creates tension between absolute emissions reductions and increasing demand for computing capacity, office space and purchased goods.
As a result, the new targets address performance across two different dimensions. Scope 1 emissions must fall in absolute terms by 42%. Selected Scope 3 emissions must decline per dollar of economic activity by 52%. Meanwhile, electricity consumption must continue to be matched with renewable sources. The combination allows for continued business growth while requiring measurable improvements in emissions efficiency and operational performance.
What changed between the first and second target cycles
The most significant shift is the introduction of an absolute reduction commitment for Scope 1 emissions. Workday's first target cycle relied heavily on renewable electricity matching and supplier engagement. Neither approach required the company to reduce fuel consumption or improve operational efficiency in absolute terms. The new Scope 1 target changes that calculus.
Reducing direct emissions by 42% will require Workday to address fuel use in backup generators, company vehicles and any gas heating systems. It may also involve changes to facilities management, such as electrifying heating or switching to lower-emission fuels. These are operational decisions rather than procurement or accounting adjustments, and they carry capital costs and logistical complexity.
The revised Scope 3 target is broader in scope than the original supplier engagement goal. Instead of tracking whether suppliers have set their own targets, Workday will measure emissions from three major categories: purchased goods and services, capital goods and business travel. The approach is more direct, but it also requires better data collection and closer collaboration with suppliers on emissions reporting.
However, the intensity-based structure of the Scope 3 target introduces ambiguity. Emissions per dollar can fall even if total emissions rise, provided revenue grows faster than the emissions increase. For a company expecting continued expansion, this creates headroom that an absolute target would not allow. Whether that flexibility undermines the environmental outcome depends on the pace of revenue growth and the actual emissions trajectory over the six-year commitment period.
Why these targets matter for businesses in other sectors
Workday's experience offers several lessons for companies setting or reviewing their own climate commitments. First, renewable electricity matching is relatively straightforward to implement but does not address underlying energy demand. Workday has maintained 100% renewable matching for six years, yet its total emissions footprint remains substantial because data centres and cloud infrastructure consume large amounts of electricity regardless of source.
Second, supplier engagement targets are difficult to achieve unless backed by procurement leverage or contractual requirements. Workday's 24% result against a 70% goal reflects the limited influence most buyers have over independent suppliers' climate policies. Suppliers face competing demands from multiple customers, and adopting a science-based target requires resources, expertise and senior commitment that not all organisations can provide.
Third, intensity-based targets offer flexibility for growing businesses but can obscure absolute emissions trends. A 52% reduction in emissions per dollar sounds ambitious, yet it allows total Scope 3 emissions to rise if revenue grows by more than 52% over the same period. For stakeholders focused on atmospheric carbon concentrations, absolute reductions matter more than efficiency improvements.
Fourth, business travel remains one of the easiest categories to control. Workday exceeded its 25% reduction target with a 31% decline, driven by policy changes and remote working practices. Travel is directly within management control through approval processes, budget limits and working arrangements. By contrast, supplier emissions depend on third-party decisions and capital investment cycles that companies cannot unilaterally direct.
Finally, data centre and cloud emissions are becoming material for any organisation relying on digital services. Workday's infrastructure footprint represents roughly one-third of its total emissions. For businesses procuring cloud services or operating their own data centres, this category warrants the same attention as energy procurement and fleet management.
Questions and uncertainties for the second commitment period
Several factors will determine whether Workday's new targets deliver meaningful environmental outcomes. The first is transparency. Workday will need to publish year-by-year progress against the fiscal 2025 baseline to allow external assessment of performance. Annual reporting should show both absolute emissions and intensity metrics, along with explanations for any variances from planned trajectories.
Second, accounting methodology matters for Scope 3 emissions. Cloud providers and data centres present particular challenges because emissions can be attributed in different ways depending on contractual arrangements and infrastructure ownership. Workday should clarify how it calculates emissions from public cloud services and whether those figures reflect actual energy consumption or supplier-reported estimates.
Third, the intensity-based Scope 3 target raises questions about absolute emissions trends. If Workday's revenue grows faster than 52% by fiscal 2031, total Scope 3 emissions could rise even as emissions per dollar fall. Stakeholders will need access to both intensity and absolute figures to assess the environmental impact accurately.
Fourth, supplier engagement remains unresolved. Workday replaced its supplier target goal with a broader emissions reduction commitment, but the 24% result from the first cycle suggests that procurement-related emissions may be hard to control. Progress will depend on whether Workday can collect better supplier data, negotiate emissions reductions into contracts or shift spending toward lower-carbon providers.
Finally, operational reductions must be reconciled with growth in computing demand. Workday's platform serves over 75 million users, and that figure is likely to increase. Greater usage typically drives higher infrastructure requirements, which in turn increase electricity consumption and capital goods purchases. Meeting a 42% absolute reduction in Scope 1 emissions while expanding facilities and user capacity will require significant efficiency improvements or fuel switching.
Five key points for businesses tracking corporate climate commitments
- Workday set a 42% absolute reduction target for Scope 1 emissions and a 52% intensity reduction target for selected Scope 3 categories by fiscal year 2031, validated by the Science Based Targets initiative in early 2025.
- The company exceeded its original business travel target with a 31% emissions reduction and maintained renewable electricity matching for six consecutive years, but only 24% of relevant suppliers adopted science-based targets against a 70% goal.
- Data centres and cloud infrastructure accounted for roughly one-third of Workday's 335,490 metric tons of CO2e emissions in fiscal year 2026, making infrastructure decisions central to its climate strategy.
- The new Scope 3 target is intensity-based, measured per dollar of economic activity, which allows total emissions to rise if revenue growth outpaces efficiency improvements.
- Supplier engagement proved the most difficult commitment to achieve in the first target cycle, highlighting the limited control most companies have over independent suppliers' climate policies.
What this means for SMEs managing climate reporting and procurement
Large companies like Workday can dedicate internal teams to climate target setting, emissions accounting and supplier engagement. However, the challenges they face apply equally to smaller businesses working through carbon reporting for the first time or responding to customer requests for emissions data. Understanding where large organisations struggle can help SMEs anticipate difficulties in their own programs.
Supplier emissions are a common pressure point. Many SMEs are now asked by larger customers to report emissions data or set science-based targets, yet few have the systems or expertise to respond quickly. Workday's 24% result shows that even well-resourced buyers struggle to drive supplier adoption at scale. For SMEs facing similar requests, the priority should be establishing a credible measurement process rather than committing to targets without understanding the baseline.
Intensity-based targets offer a pragmatic option for growing businesses, but they require clear communication. Stakeholders may assume that a percentage reduction means absolute emissions will fall, when in fact total emissions could rise if economic activity grows faster. SMEs using intensity metrics should report both absolute and per-unit figures to avoid misunderstandings in tender responses or sustainability disclosures.
Renewable electricity matching is accessible for businesses of most sizes through green tariffs or renewable energy certificates. However, it does not eliminate energy consumption or reduce demand on the grid. For SMEs, combining renewable procurement with energy efficiency measures delivers better environmental and cost outcomes than relying on renewable matching alone. Reducing overall consumption lowers bills and eases pressure on infrastructure, regardless of energy source.
Business travel remains one of the fastest categories to address. Workday's 31% reduction shows that policy changes and remote working can deliver results within a single target cycle. SMEs can apply similar approaches through travel approval processes, video conferencing investment and flexible working policies. Unlike supplier emissions or capital goods, travel is directly within management control and responds quickly to operational decisions.
For SMEs supplying larger companies, these trends point to increasing scrutiny of Scope 3 emissions. As buyers shift from supplier engagement targets to direct emissions measurement, suppliers will face more detailed data requests and potentially contractual requirements. Preparing now by measuring emissions, identifying reduction opportunities and understanding reporting standards will become a competitive advantage in public and private sector procurement. We offer carbon reporting support and PPN 06/21 compliance services for businesses navigating these requirements.
Where to find further information and official guidance
The Science Based Targets initiative provides the validation framework used by Workday and thousands of other companies. The SBTi website includes guidance on setting targets, sector-specific resources and a database of validated commitments. Businesses considering science-based targets should start with the SBTi's criteria and assessment process.
The UK government's greenhouse gas reporting conversion factors are updated annually by the Department for Energy Security and Net Zero. These factors are used to calculate emissions from energy consumption, travel and other activities. They provide the standard methodology for carbon reporting in the UK and are essential for accurate emissions accounting.
For supplier engagement and procurement-related emissions, the Procurement Policy Note 06/21 sets out the UK government's requirements for carbon reduction plans in public sector contracts. Although it applies to suppliers bidding for central government contracts above £5 million, the framework offers a useful reference for private sector procurement policies as well.
Businesses can also consult the government's guidance on measuring and reporting environmental impacts, which covers carbon accounting, Scope 1, 2 and 3 emissions definitions, and reporting standards. This resource is particularly useful for SMEs establishing measurement processes for the first time.
Additionally, our compliance and carbon reporting services support businesses with emissions measurement, target setting and regulatory reporting. We also provide training through SBS Academy on carbon accounting, Scope 3 emissions and sustainable procurement for teams building internal expertise.