From ESG Compliance to Net Zero Commitments: How Businesses Can Bridge the Gap

Just 16% of the world's largest companies are expected to achieve their Net Zero targets. Worse still, almost half of those companies have increased emissions instead of reducing them. While ESG advisory is becoming an urgent business requirement, the difference between compliance and actual climate action has never been greater.

The numbers paint a stark picture of our current situation. By 2025, ESG-mandated assets are projected to represent half of all professionally managed investments, totalling around $35 trillion. Meanwhile, 90% of public companies have adopted sustainability reporting to secure investor confidence. Yet despite these impressive statistics, the journey from basic ESG compliance to meaningful Net Zero commitments remains challenging for most businesses.

Understanding the Current Landscape

The corporate sector is under unprecedented pressure to take action on climate change. Businesses have to reduce emissions by a minimum of 45% from the 2010 baseline to limit global warming to 1.5 degrees Celsius. It's not merely an environmental necessity – it's turning into a business imperative for survival.

Recent data shows that while 37% of major companies have set Net Zero targets, many struggle with implementation. The Science-Based Targets initiative now requires companies to halve their emissions by 2030 and reduce them by 90% by 2050. This aggressive timeline has created a sense of urgency that many organizations find overwhelming.

ESG services have advanced swiftly to address this need. Firms no longer simply check a box for compliance. They require rich strategies that yield tangible outcomes. This has opened doors for businesses that can effectively bridge the gap between existing performance and future promises.

The Compliance Challenge

Legacy ESG compliance tends to centre on documentation and reporting. Companies gather information, release sustainability reports, and comply with regulations. These measures are essential, but don't necessarily translate to the profound shifts required to meet Net Zero objectives.

Most companies discover substantial gaps when they move beyond mere compliance thinking. They find that their existing practices lack the depth needed for significant carbon reduction. Professional ESG gap analysis comes into play here. It serves to identify the specific areas where businesses fail to meet their ambitious climate goals.

The complexity increases further when businesses operate in multiple regions. Various nations have diverse ESG regulations and demands. This adds complexity to multinational corporations attempting to develop cohesive sustainability plans.

Building the Bridge to Net Zero

Effective companies are discovering that the journey from ESG compliance to Net Zero involves a paradigm shift in strategy. Rather than viewing sustainability as a standalone function, they're making it an integral part of all aspects of their business.

The first step is to conduct a comprehensive ESG gap analysis. This step considers existing performance in relation to future Net Zero obligations. It highlights the precise areas where improvement is needed and develops practical roadmaps for change. 

Forward-thinking companies are also making investments in full-service ESG advisory assistance. These engagements provide expert services that help resolve complex sustainability issues. They assist companies in creating strategies that go beyond compliance to build genuine competitive advantages.

Industry Success Stories

Large corporates are already showing the way that this bridge can be constructed effectively. Standard Chartered has just outlined a comprehensive Transition Plan, committing $300 billion to sustainable finance. They're well-positioned to deliver more than $1 billion of sustainable finance revenues, demonstrating how Net Zero approaches can drive business value.

But the ride is not always smooth. HSBC recently extended its Net Zero timeline by 20 years, testifying to the difficulty that many firms encounter. With over $394 billion of sustainable finance since 2020, they realized that the original timeframe proved unattainable with the current state of markets.

These instances clearly indicate why expert ESG services are becoming more essential. Companies require professional advice to attain their targets while maintaining ambitious climate goals. Balancing aspiration and achievability needs planning and continued assistance.

Conclusion

The numbers don't lie: companies can no longer view sustainability as an add-on. As ESG-mandated assets are projected to grow to $35 trillion by 2025, companies that fail to close the gap will be left behind. It takes more than conformity to succeed – it needs end-to-end strategies that embed climate action in all facets of business.

Ready to turn your ESG compliance into real Net Zero action? SGS has brought together more than 30 years of sustainability innovation with world-class testing, inspection, and certification expertise through our far-reaching IMPACT NOW for Sustainability suite. 

Ranked in the top 1% of the S&P Global Sustainability Yearbook 2025 and an "Innovator" in ESG assurance services, SGS delivers the experience you require to close the gap between compliance and actual climate action. Don't wait for regulations to force your hand – partner with SGS today to build a sustainable future for your business and our planet.