Most financial target-setting: rigorously modelled bottom-up, grounded in macroeconomic data, sensitive to what levers a company can actually pull, stress-tested.
Many climate targets: plug carbon baselines into a free online "science-aligned targets" model and lock in the 1.5°C-aligned top-down targets that are spat out.
Let's imagine a fictional world introducing top-down financial targets — and see what happens.
Chapter One
Once upon a time, in a land Not So Far Away, there lived a wise Chancellor. The economy was faltering and public deficit rising, so they proclaimed a Hard Economic Target — 50% growth by 2030 — to save the realm.
Suddenly, flurries of activity ensue. Up springs the new Revenue Target Validation Institute (RTVi), which issues best practice standards: interim revenue targets should be at least 50% growth by 2030, from a 2025 baseline. Hot on its heels, the voluntary frameworks: [Insert Industry Here] for Revenue Growth. Best practice: 50% by 2030. Better practice: get your target validated by the RTVi.
All well intentioned. All sound science.
The Big 4 rub their hands with glee. Disclosure statements will need to be audited. The strategy consulting arms will need to guide companies through the legislative confusion. The economy grows, briefly — largely driven by the consulting and audit firms who are extremely busy helping companies navigate this new legislation.
Chapter Two
Tesko, Bromfton Bikes, and Storling Bank all plug their baseline figures into the RTVi's free online tool and nail down their identical 50% growth by 2030 targets. Validated by RTVi. Assured by BwC.
Three very different businesses. One identical target.
Investors scratch their heads in bewilderment and go back to focusing on their private models (which is sort of what they were doing anyway). The citizens of the land feel marginally reassured that "something is being done."
Chapter Three
But then: a sudden tariff shock from Not So Far Away's trading partners in Wishington.
There is now slim-to-no chance of meeting the Hard Economic Target. Everyone knows it. But no one talks about it. So the 50% by 2030 targets remain — the maths hasn't changed, even if the context has — and public shaming awaits any company that tries to back away.
Investors stop even pretending to pay attention to the public targets and work entirely from their own models.
Chapter Four
Time passes. 2030 approaches.
Risks that could have been managed were overlooked — after all, everyone had a target in place. Reputation damage from missing targets feels inevitable. Yet little meaningful action was taken, because it was never clear what levers each company could actually pull.
The moral of the story? Unless you're a powerful market maker with influence over policy, technology, and the economy, it's probably better to set climate targets the way you set financial targets.
What is wrong with using standardised science-based target frameworks?
Nothing is wrong with using them as a reference point or for disclosure alignment. The problem is when the framework substitutes for actual strategic analysis. A target that ignores your specific business model, the levers you can actually pull, and the macroeconomic conditions of your sector will produce numbers that investors quickly learn to ignore — and that leave management without a useful guide to action.
How should companies approach setting climate targets instead?
The same way they set financial targets: bottom-up, starting from what the business model actually allows, building through the specific decarbonisation levers available (operational changes, supplier engagement, product shifts, capital reallocation), then stress-testing against realistic scenarios. A target that can't be explained in terms of specific actions is a disclosure exercise, not a strategy.
