How Do I Describe My Company's Climate Targets in an ESG Report?

"We don't have climate targets": you might have more than you think

When SMEs reach the climate targets section of their ESG report, a common first reaction is: "We don't have any of those." Often, this comes from assuming a climate target has to look like something out of a large corporate sustainability report — science-based, externally validated, and highly technical.

It doesn't. A climate target for a VSME report is simply a clear statement of where your company wants to improve over time, and how you'll know if you've succeeded. If you have any sense of direction at all — wanting to use less energy, cut business travel, or shift to renewable electricity — you already have the raw material for a target. The task is to make it specific and measurable.

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What is a climate target, exactly?

It helps to separate three things that often get blurred together: a policy, an initiative, and a target.

• Policy: your general aim or approach. For example: "We aim to reduce our environmental impact."
• Initiative: a specific action you're taking to support that aim. For example: "We replace company vehicles with electric vehicles."
• Target: the measurable outcome you want to achieve. For example: "Reduce Scope 1 emissions by 30% before 2030."

The policy explains your general direction. The initiative explains what you're doing. The target explains what result you're aiming for and by when. All three can coexist in your ESG report, but the targets section specifically wants the third one — the outcome, not the general aim or the action itself.

If you find yourself writing something that sounds like a policy or an initiative in the targets section, it's worth rephrasing it as an outcome instead.

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Good targets are measurable

This is the single most important principle for this section. A good climate target usually answers four questions:

• What will improve?
• By how much?
• By when?
• How will progress be measured?

To make targets measurable, include specific details wherever possible:

• Percentages ("reduce by 20%")
• Quantities ("reduce electricity consumption by 10,000 kWh")
• Dates ("by 2028")
• Baseline years, where available ("compared to 2025 levels")

A target like "reduce Scope 2 emissions by 15% by 2027, compared to a 2025 baseline" is far stronger than "reduce our electricity use," because it gives a reader — and your own team — a clear way to check progress later. Targets that can't be measured can't really be tracked, which makes them hard to report on honestly in future years.

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Think in short, medium, and long-term horizons

It often helps to spread your ambitions across different time horizons rather than trying to capture everything in a single target.

• Short-term targets might cover things you can act on relatively quickly:
  • Energy efficiency improvements
  • Waste reduction
  • Switching to renewable electricity
• Medium-term targets often involve more structural change:
  • Scope 1 emissions reductions
  • Scope 2 emissions reductions
  • Scope 3 improvements
  • Supplier engagement on emissions data or practices
• Long-term targets tend to be broader ambitions:
  • Net-zero ambitions
  • Significant overall carbon reductions
  • Long-term operational transformation

Not every company needs a target in every category, and not every category needs to be filled just for the sake of completeness. A small professional services firm might reasonably have only short-term and medium-term targets, with no long-term net-zero ambition yet defined — and that's a perfectly reasonable place to be.

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Choose targets that fit your business

Climate targets should reflect what's actually material to your company, not a generic list copied from elsewhere. Consider which of the following genuinely apply to your operations:

• Electricity consumption
• Heating
• Company vehicles
• Business travel
• Employee commuting
• Renewable electricity purchasing
• Waste reduction
• Supplier engagement
• Procurement choices
• Overall carbon footprint reduction
• Resource efficiency

A logistics company will likely have meaningful targets around vehicles and fuel efficiency. A software company might focus more on electricity, business travel, and renewable energy purchasing. Pick the areas where your company actually has influence and relevance — a handful of well-chosen, relevant targets is far more useful than a long list covering areas with no real connection to your business.

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Make targets realistic

It's tempting to reach for ambitious-sounding language, especially net-zero commitments, because they read well. Resist that unless there's a genuine plan behind it.

Be cautious about committing to things like:

• Net zero within two years
• 100% emissions reductions
• Formally "science-based" targets

unless you have a credible, realistic plan to get there. An overly ambitious target that's abandoned or missed a year later damages the credibility of your report far more than a modest target that's actually achieved. If in doubt, start with a target you're confident you can meet, and increase your ambition in future reporting periods as you build a track record.

A modest, achieved target is simply worth more than an impressive, broken promise.

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Explain who's accountable

A target is more credible when it's clear someone is actually responsible for it. Briefly cover:

• Who owns the target — a person, role, or team
• How progress is monitored — even an informal annual check-in counts
• How often targets are reviewed — annually is common for SMEs
• How targets are updated — for example, revised as new data becomes available or as the business grows

This doesn't need to be elaborate. A short note like "targets are reviewed annually by management as part of the ESG reporting process" is enough to show the target is actively managed, not just written once and forgotten.

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Common mistakes to avoid

• Confusing targets with policies: A general aim like "reduce our environmental impact" is a policy, not a target — it needs a measurable outcome attached.
• Listing activities instead of outcomes: "We are switching to LED lighting" is an initiative. The target is the result you expect from it, such as a percentage reduction in energy use.
• Forgetting deadlines: A target without a date is hard to track and easy to forget.
• Forgetting baseline years: Without a starting point, a percentage reduction is meaningless — "reduce by 20%" needs a "compared to what year" attached.
• Setting unrealistic ambitions: Big claims without a credible plan behind them undermine trust in the report.
• Writing vague statements: Phrases like "reduce emissions" or "become more sustainable" don't say what will change, by how much, or by when.

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Example structure (illustrative only)

Here's an outline showing how you might organise your climate targets — not a complete example, but a guide to structuring your own:

1. Emissions reduction targets: specific Scope 1, 2, or 3 goals, with percentages, dates, and baseline years
2. Renewable energy targets: for example, a target percentage of electricity from renewable sources by a given year
3. Operational efficiency targets: energy, waste, or resource-related goals
4. Supply chain targets: goals around supplier engagement or data collection, if relevant
5. Governance and accountability: who owns the targets and how progress is reviewed

You don't need to fill every section, and the level of detail in each should reflect what's genuinely material and realistic for your company.

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How Wardn helps

Wardn helps companies define climate targets in a structured way, making it easier to keep them consistent from one reporting year to the next. As your business evolves, targets can be updated and progress monitored within the same structure, rather than starting from scratch each time. This also makes it straightforward to integrate targets directly into your ESG reporting, alongside the data needed to track whether they're being met.

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Frequently asked questions

Do our climate targets need to be scientifically validated?

No. Climate targets in a VSME ESG report don't need to be formally science-based or externally validated. They simply need to be realistic, measurable, and specific to your company's actual operations and ambitions.

What's the difference between a climate policy and a climate target?

A policy describes your general aim (for example, "we want to reduce our environmental impact"). A target describes a specific, measurable outcome (for example, "reduce Scope 1 emissions by 30% before 2030"). Targets need a measurable result attached, not just a direction.

What should a good climate target include?

A strong target usually states what will improve, by how much, by when, and how progress will be measured. Including percentages, quantities, dates, and baseline years makes a target far more credible and trackable.

Is it bad to set a modest climate target instead of an ambitious one?

No. A modest, realistic target that your company actually achieves is more valuable and more credible than an ambitious target, like early net zero, that's set without a credible plan and later missed.

Do we need targets in every category, like short-term, medium-term, and long-term?

No. Not every company needs targets across all time horizons or in every operational area. Focus on the categories that are genuinely material to your business rather than filling in categories just for completeness.

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