Corrected on 16 October 2026: The statements on offsetting, forward-looking claims and sanctions under the EmpCo Directive were made more precise.
Updated on 25 October 2026: The time references to the EmpCo Directive, which has applied since 27 September 2026, were adjusted.
Last June broke all records again. Temperatures above 40 degrees in many European cities are causing health emergencies as well as enormous costs for infrastructure and agriculture. That is not only making the population sweat: companies are also under growing pressure to keep their own contribution to the climate crisis as low as possible and to reduce their emissions systematically. A sober look at the state of transition plans – and why, in the end, this is not a question of regulation.
This development is no outlier: According to current calculations by the Wegener Center in Graz, long-term warming will exceed the Paris guardrail of 1.5 degrees from 2026 onwards – 1.62 degrees above pre-industrial levels is expected for 2026, and 1.71 degrees for 2027.[1] The WMO also assumes that the five-year average for 2026–2030 will, with high probability, be above 1.5 degrees.[2] For ESG professionals, the question is therefore less whether, but how robust their own transition plan is. And the pressure for it now comes less often from the statute book than from their own customer base. Time for an honest stocktake: Where do companies really stand with their decarbonisation and transition plans?
The Real Driver: The Market, Not the Law
Regulation certainly plays a role. But anyone who talks to sustainability professionals now often hears “our biggest customer asked how we plan to reduce by 2040”. Large buyers are systematically passing their decarbonisation pressure on to their supply chains: through the CDP platform alone, more than 270 large buyers have recently requested environmental data from around 45,000 suppliers.[3] A supplier that cannot show a robust transition plan risks losing the contract – regardless of what a law prescribes.
This “trickle-down effect” no longer affects only the large corporations that are subject to regulatory obligations. Small and medium-sized enterprises, too, are increasingly collecting their own emissions data and developing reduction plans – simply because business partners, financiers and end customers expect it.[4] The market is creating facts on the ground.
The Status Quo: Ambition Yes, Substance Often Not (Yet)
The good news first: climate targets have arrived in the business world. The bad news: for many companies there is still a noticeable gap between “target set” and “credible plan”.
11,000+[5]
Companies and financial institutions worldwide with SBTi-validated climate targets (as of June 2026) – around 41% of global market capitalisation.
12,000+[6]
Companies disclosed transition plan indicators to CDP – but only a fraction meet most of the credibility indicators.
45,000[3]
Suppliers from which more than 270 large buyers alone have actively requested environmental and climate data via CDP.
CDP confirms this trend in its current Corporate Health Check: a publicly available transition plan aligned with 1.5 degrees is now one of the decisive levers that set companies apart from the leading group – together with variable pay for management, robust processes for climate risks and genuine supply chain engagement.[7] Those who do not meet these criteria remain stuck in the middle of the field even with good ambitions – and become a risk for demanding customers in their own supply chains.
In short: Having a target is the entry ticket. Whether a company really manages the change – and thereby stays compatible with customers and business partners – is decided by the concrete roadmap behind it: including resources, milestones and responsibilities. It is precisely these roadmaps that help decide whether the curve of global warming still flattens or heatwaves become part of our everyday lives.
What Really Makes a Transition Plan “Heatproof”
A climate transition plan is more than a PowerPoint slide with a target year. Internationally recognised frameworks such as the recommendations of the Transition Plan Taskforce – now housed at the IFRS Foundation as guidance – bundle good practice into three guiding principles:[8]
- Ambition
The plan reflects the urgency of action and links decarbonisation, climate risk preparedness and the contribution to the transformation of the economy as a whole. Realistic, long-term and externally validated targets demonstrably reach their goal more often than uncoordinated “wish numbers”.
- Action
Targets are translated into concrete steps that can be implemented in the short term – with clear resource planning. Typical stumbling blocks are vague wording, missing budgets and a lack of organisational backing.
- Accountability
Governance, transparent reporting and – ideally – a link to remuneration models anchor the plan firmly in the organisation. A lack of accountability is one of the most common reasons why climate targets are missed in the end.
In practice, most companies combine two approaches: the top-down approach, in which overarching targets come first, and the bottom-up approach, which starts from the measures that can actually be implemented. Only reconciling both perspectives makes a plan credible and feasible.
Regulation Catches Up – EmpCo as an Additional Yardstick
While the market has long been creating facts, regulation is catching up with further guardrails. Since 27 September 2026, the EmpCo Directive (“Empowering Consumers for the Green Transition”) has also made the communication side stricter.[9]
EmpCo prohibits generic, unsubstantiated environmental claims. The claim that a product is “climate neutral” on the basis of offsetting is prohibited. Anyone who advertises with goals such as “on the way to net zero by 2030” needs a detailed implementation plan with measurable interim targets, which independent experts review. In the case of widespread cross-border infringements, companies face fines of up to 4% of annual turnover in the Member States concerned; otherwise the main consequences are actions for injunction and damages.[10]
For companies, this means: the transition plan that the market is already demanding also becomes the legal safeguard for every climate claim communicated externally. Those who have their data for customer and supply chain requests well under control will find EmpCo compliance considerably easier anyway.
Conclusion: Cooling Down Only Comes with Real Emissions Reduction
The figures show a divided picture: more and more companies are setting targets – but only a minority back them with a plan that truly brings together ambition, implementation and accountability. Today, this change is driven above all by the market: by customers, procurement departments and financing partners who want to see concrete plans instead of declarations of intent. In the end, though, one thing above all counts: whether we stop at 1.6 degrees or drift towards 3 degrees and more is decided by precisely the reduction plans that are written – and implemented – today. A transition plan is therefore not a compliance document, but the real lever against the next, even hotter summer.
How NetCero's ESG Management Module Helps
Whether a customer request, a tender or a supply chain audit: a well-founded transition plan must deliver robust answers quickly. NetCero's ESG Management module provides the foundation for this:
✅ End-to-end GHG accounting across Scope 1–3 as an auditable data basis that stands up to customers and business partners at any time
✅ Structured recording of reduction measures, milestones and responsibilities instead of loose Excel lists
✅ Cost-benefit comparisons of measures and AI-supported recommendations
✅ Planning and ongoing monitoring of target achievement and progress, so that the transition plan remains a living management tool – not just a report
✅ A consistent data source for customer requests, tenders, CSRD/ESRS, SBTi validation and EmpCo-compliant communication
Practical. Pragmatic. Audit-proof.
SOURCES
1. Wegener Center for Climate and Global Change, University of Graz – short-term temperature forecast 2026/2027, cited in: science.ORF.at, “Erderwärmung: Jahr für Jahr neue Temperaturrekorde” (June 2026).
2. World Meteorological Organization (WMO), “Global Annual-to-Decadal Climate Update” (28 May 2026).
3. CDP / “5 CDP Reporting Tips To Prepare for the 2026 Cycle” (Yahoo Finance, January 2026) – more than 270 large buyers request environmental data from around 45,000 suppliers.
4. susform GmbH, “Corporate Carbon Footprint und Dekarbonisierung” (2025), section 2.1 – trickle-down effect along the supply chain; and PwC, “Stimme der Verbraucher:innen 2025”.
5. Science Based Targets initiative – company statistics & ACA update, as of June 2026, summarised in: GlobalChanger, “SBTi einfach erklärt” (2026). globalchanger.com
6. CDP, “From Plans to Capital: Unlocking Credible Transition Finance at Scale” (2026), evaluation of transition plan indicators from more than 12,000 company disclosures. cdp.net
7. CDP Corporate Health Check 2026, in collaboration with Oliver Wyman. cdp.net
8. Transition Plan Taskforce (TPT) – Disclosure Framework, referenced in: susform GmbH, “Corporate Carbon Footprint und Dekarbonisierung: Standards, Herausforderungen und Best Practices” (2025), section 5.1.
9. European Union, Directive (EU) 2024/825 on empowering consumers for the green transition (“EmpCo”); applicable from 27 September 2026.
10. KPMG Law, “Die EmpCo tritt in Kraft – Antworten auf die wichtigsten Praxisfragen” (2026); sustainability consultancy S&F Reputation, “EmpCo: Was die Richtlinie ab 2026 für die Nachhaltigkeitskommunikation bedeutet” (2026). kpmg-law.de · nachhaltigkeitsberatung-sfr.de
