Inside Workday’s Second Round of Science-Based Targets
Workday has set a second round of climate targets after completing its first cycle of science-based commitments. The enterprise software company has broadened its approach to include absolute emissions cuts, continued renewable electricity sourcing, and a wider range of supply chain activities. For UK businesses watching how technology suppliers manage their carbon footprint, the changes reveal both progress and persistent challenges in decarbonising complex service operations.
The company's first targets were validated by the Science Based Targets initiative in 2022. They aimed to limit warming to 1.5°C above preindustrial levels. Workday met its renewable electricity goal and exceeded its business travel reduction target. However, supplier engagement fell well short of expectations. Understanding what worked and what didn't offers useful lessons for any business working through its own climate commitments.
Meanwhile, the updated targets introduce absolute reduction goals for directly controlled emissions and extend the scope of supply chain reporting. They also expose the gap between market-based accounting and physical emissions reductions. For businesses assessing their own suppliers or trying to meet tender requirements, these distinctions matter.
What Workday achieved in its first target cycle
Workday's original targets covered all three emissions scopes. The company committed to maintaining 100% renewable electricity for offices and data centres through fiscal year 2030. It also pledged to cut business travel emissions by 25% by FY2026, measured against an FY2020 baseline. Finally, it aimed to ensure that suppliers representing 70% of spending on purchased goods, services and capital equipment had adopted science-based targets by FY2026.
The renewable electricity commitment was met for six consecutive fiscal years. Business travel emissions fell by 31%, surpassing the 25% target. Both achievements reflect areas where Workday held direct operational control or could adjust internal policy. Renewable energy procurement involves contracting decisions. Travel reduction depends on corporate travel policies and remote working practices.
However, the supplier target proved far more difficult. By the end of FY2026, only 24% of relevant suppliers by spending had established emissions targets. That figure actually declined slightly from the previous year. Consequently, the company missed its 70% goal by a significant margin. This outcome illustrates a broader issue facing technology firms: indirect emissions from suppliers, cloud infrastructure and purchased equipment are harder to influence than direct operations.
Workday's experience mirrors challenges faced by UK SMEs working to meet public sector sustainability requirements. Procurement policy note 06/21 requires suppliers bidding for major government contracts to publish carbon reduction plans and commit to net zero. Many businesses find that their own suppliers have not yet adopted similar commitments, making it difficult to report or reduce Scope 3 emissions comprehensively.
New targets broaden the scope and shift the approach
Workday's updated targets were validated by the Science Based Targets initiative and run through fiscal year 2031. They use FY2025 as the baseline for measuring emissions reductions. The new commitments include three main elements.
First, Workday will reduce absolute Scope 1 emissions by 42% by FY2031. Scope 1 covers greenhouse gases from sources the company controls directly, such as fuel combustion in company vehicles or on-site equipment. This is Workday's first absolute reduction target for directly controlled emissions.
Second, the company will continue sourcing 100% renewable electricity annually through FY2031. This extends the existing Scope 2 commitment for another five years. Scope 2 covers emissions from purchased electricity, heat or steam.
Third, Workday will reduce emissions from purchased goods and services, capital goods and business travel by 52% per dollar of spending by FY2031. This Scope 3 target replaces the previous business travel commitment and broadens coverage to additional categories of indirect emissions. It also shifts from an absolute reduction goal to an intensity-based metric, measuring emissions per unit of spending rather than in total tonnage.
The shift to an intensity target reflects the challenge of controlling emissions embedded in purchased goods, capital equipment and supplier operations. As a company grows, absolute Scope 3 emissions may rise even if efficiency improves. An intensity metric allows for growth while still requiring emissions performance to improve relative to economic activity.
Workday describes the updated commitments as a "next-generation set of SBTs" focused on "actionable, science-aligned decarbonization." The language suggests a more structured approach to reducing physical emissions rather than relying primarily on renewable energy procurement and supplier pledges.
Emissions data reveals the scale of the challenge
Workday reported total emissions of 335,490 metric tons of carbon dioxide equivalent in FY2026. Approximately one-third of this total came from the company's data centre and cloud footprint. That figure is significant because much of the underlying computing capacity is provided through external data centre and cloud partners, not facilities Workday owns or operates directly.
This split illustrates why supply chain emissions are so difficult to manage. A software company's carbon footprint depends heavily on infrastructure owned and operated by third parties. Reducing those emissions requires either switching to lower-carbon providers, negotiating changes to how existing suppliers operate, or improving the energy efficiency of the services purchased.
Workday's public disclosures distinguish between market-based and location-based Scope 2 accounting. In a 2025 UK carbon reduction plan, the company reported market-based Scope 2 emissions of zero. This reflects renewable electricity matching through instruments such as renewable energy certificates or power purchase agreements. However, location-based emissions remained substantially higher because they reflect the average emissions intensity of the electricity grids where energy was actually consumed.
This distinction is important for UK businesses evaluating their own carbon reporting or assessing supplier claims. Market-based accounting allows companies to claim zero emissions if they purchase renewable energy certificates, even if the physical electricity they consume comes from a grid supplied partly by fossil fuels. Location-based accounting reflects the actual carbon intensity of the grid at the point of use.
Neither method is incorrect, but they answer different questions. Market-based figures show financial support for renewable energy. Location-based figures show physical grid conditions. For businesses trying to understand real-world emissions impacts, both metrics provide useful context.
Why supplier engagement remains a material gap
The 24% supplier result reveals a persistent challenge. Workday's direct operational footprint can be managed through facility efficiency, renewable electricity procurement and internal policies on travel or fuel use. Emissions from suppliers, cloud infrastructure, purchased equipment and business travel depend on decisions made by organisations outside Workday's direct control.
The original supplier commitment required 70% of suppliers by spending to establish science-based targets by FY2026. Achieving that would have meant Workday's major vendors had adopted formal, validated climate plans aligned with limiting global warming to 1.5°C. Instead, fewer than one in four relevant suppliers made such commitments.
Several factors likely contributed to this shortfall. Smaller suppliers may lack the resources or expertise to develop science-based targets. Some may operate in sectors where decarbonisation pathways are less clear or more costly. Others may simply not perceive sufficient commercial or regulatory pressure to act.
For UK businesses, this dynamic is familiar. Many SMEs face requests from larger customers to provide emissions data or adopt reduction targets, but lack the internal capacity to respond. Those selling to the public sector must now produce carbon reduction plans to qualify for major contracts, as outlined in our net-zero program for carbon reporting compliance. Yet their own suppliers may not provide the data needed to calculate Scope 3 emissions accurately.
Workday's new 52% Scope 3 reduction target places greater emphasis on measurable emissions performance rather than supplier target adoption. This shift may make the goal more outcome-oriented. However, it also increases the importance of reliable supplier data, consistent emissions accounting and collaboration with vendors that control much of the relevant footprint.
Five key facts about Workday's updated climate targets
- Workday's new targets were validated by the Science Based Targets initiative and run through fiscal year 2031, with FY2025 as the baseline for emissions reductions.
- The company will reduce absolute Scope 1 emissions by 42% and continue sourcing 100% renewable electricity annually through FY2031.
- A new Scope 3 target requires a 52% reduction in emissions per dollar of spending on purchased goods, services, capital goods and business travel by FY2031.
- Workday exceeded its original 25% business travel reduction target, achieving a 31% cut against the FY2020 baseline.
- Only 24% of relevant suppliers by spending had adopted science-based targets by FY2026, falling well short of the original 70% goal and highlighting persistent challenges in supply chain engagement.
How absolute targets change the decarbonisation task
Workday's second target cycle represents a shift in emphasis. The first round relied heavily on renewable electricity sourcing, business travel reductions and supplier participation. The new framework adds an absolute reduction target for Scope 1 emissions and broadens the Scope 3 commitment to purchased goods, capital goods and travel.
Absolute targets require actual reductions in emissions tonnage, not just improvements in efficiency or changes in accounting. Workday's 42% Scope 1 target means the company must cut emissions from directly controlled sources by nearly half over six fiscal years. This cannot be achieved through renewable energy certificates or offsetting. It requires operational changes such as switching to lower-carbon fuels, improving energy efficiency or reducing the scale of emissions-intensive activities.
The continued renewable electricity commitment should help limit market-based Scope 2 emissions. However, the Scope 1 target is arguably more consequential because it demands reductions in emissions from sources under Workday's direct operational control. For UK businesses, this distinction matters when assessing supplier commitments or developing internal reduction plans.
The broader Scope 3 goal is likely to be the most difficult commitment. Purchased goods, capital equipment, suppliers and cloud-related infrastructure can represent a large share of a software company's total climate impact. Workday has limited direct control over these emissions. The company can influence supplier behaviour through procurement policies, contract terms or technical specifications, but it cannot dictate how suppliers operate their own facilities or source their own materials.
Furthermore, measuring Scope 3 emissions requires data from suppliers who may not track or report their own carbon footprints consistently. This creates gaps in reporting accuracy and makes it harder to verify whether reductions are genuinely occurring. Businesses working on their own Scope 3 reporting often encounter the same problem: suppliers either cannot or will not provide the emissions data needed for reliable calculations.
Workday's supplier-performance shortfall demonstrates the scale of this challenge. Even a large, well-resourced technology company with significant purchasing power struggled to persuade the majority of its suppliers to adopt formal climate targets. Smaller UK businesses with less procurement leverage face even steeper obstacles.
What renewable energy claims actually mean
Workday's market-based Scope 2 emissions may be zero under its accounting approach, while location-based emissions remain substantial. This gap highlights the limits of evaluating corporate climate progress through renewable energy claims alone. Assessing real progress requires examining absolute emissions, the quality of renewable energy instruments, changes in operational demand and the treatment of value chain emissions.
Renewable energy certificates and power purchase agreements support the development of renewable generation capacity. They provide revenue streams that can make wind and solar projects financially viable. However, they do not always guarantee that renewable electricity is physically delivered to the facilities claiming zero emissions. In many cases, a company buys certificates representing renewable generation in one location while consuming grid electricity from mixed sources in another.
This practice is legitimate under market-based accounting rules and can contribute to decarbonising electricity grids over time. Nevertheless, it does not eliminate the physical emissions associated with electricity consumption in regions where grids remain carbon-intensive. For businesses trying to reduce actual emissions rather than simply improve reported figures, this distinction is critical.
UK businesses preparing carbon reduction plans for public sector tenders should be aware of these accounting differences. The Environment Agency and other regulators expect businesses to report both market-based and location-based Scope 2 emissions where applicable. Providing both figures gives a clearer picture of physical emissions and financial support for renewable energy.
Training on these reporting requirements is available through resources such as the SBS Academy, which covers carbon accounting standards and practical approaches to Scope 1, 2 and 3 reporting for UK SMEs.
Lessons for UK businesses managing supplier emissions
Workday's experience offers several practical insights for UK businesses working through their own climate commitments. First, targets covering directly controlled operations are easier to meet than those relying on supplier engagement. Renewable electricity procurement, facility efficiency and internal travel policies can be implemented through management decisions. Supplier emissions require negotiation, collaboration and sometimes contractual leverage that smaller businesses may not possess.
Second, intensity-based targets provide flexibility for growing businesses but require robust data systems to track emissions per unit of output or spending. Absolute targets are simpler to understand and harder to manipulate, but they can become difficult to meet if business activity expands significantly.
Third, supplier engagement takes time and persistence. Workday's 24% result suggests that even sustained effort over several years may not produce the desired level of participation. Businesses should plan for this reality when setting Scope 3 targets and consider whether alternative approaches, such as direct emissions measurement or supplier audits, might be more effective.
Fourth, transparency in reporting builds credibility. Workday disclosed both its successes and shortfalls, including the substantial gap between its supplier target and actual performance. This honesty allows stakeholders to assess progress accurately and hold the company accountable. UK businesses should adopt a similar approach, particularly when reporting to customers or public sector buyers who expect detailed carbon reduction plans.
Finally, the gap between market-based and location-based emissions reporting highlights the importance of understanding accounting standards. Businesses should seek expert advice on how to measure and report emissions accurately, particularly when preparing for compliance obligations or tender requirements.
Where to find authoritative guidance on corporate climate targets
The Science Based Targets initiative provides detailed guidance on setting and validating corporate climate targets aligned with limiting global warming to 1.5°C. Their resources explain the differences between absolute and intensity-based targets, Scope 1, 2 and 3 accounting, and sector-specific decarbonisation pathways. Visit the Science Based Targets initiative website for technical guidance and validation criteria.
The UK government's guidance on publishing carbon reduction plans is available through the Department for Energy Security and Net Zero. This includes requirements under Procurement Policy Note 06/21 for suppliers bidding on major public sector contracts. Full details are available on the gov.uk Procurement Policy Note 06/21 page.
The Greenhouse Gas Protocol sets international standards for corporate emissions accounting and reporting. Their guidance covers Scope 1, 2 and 3 measurement, market-based versus location-based accounting, and reporting principles. Resources are available through the Greenhouse Gas Protocol website.
UK businesses seeking practical support with carbon reporting, science-based target development or supplier engagement can explore options through our compliance services for ESG and carbon reporting, which provide structured support for meeting regulatory requirements and public sector tender criteria.