From the outside, it may seem like corporate climate action is stalling – only 7% of global and 6% of African companies fully report greenhouse gas emissions across Scopes 1, 2, and 3, according to the fifth annual climate survey report – How Companies are Tackling the Climate Change – and creating Value – by Boston Consulting Group and CO2 AI.
Globally, reporting is down from 9% in 2024 and 10% in 2023. Similarly, the number of global companies setting targets to reduce emissions across all scopes decreased three percentage points YoY to 13% following a high of 19% in 2023, while only 10% of African companies set targets for all scopes – three percentage points below the global average.
The report draws on responses from 1 924 executives responsible for their company’s emissions measurement, reporting, and reduction initiatives. These companies come from 16 major industries and 26 countries, and are collectively responsible for 40% of global GHG emissions.
African companies are broadly aligned with global peers in terms of emissions transparency, but fewer have set explicit targets to reduce those emissions. This suggests that while disclosure may be driven by external requirements from other jurisdictions or customers, there is comparatively less emphasis on decarbonisation relative to the rest of the world.
Measurement of climate-related risk is also limited, with only 12% of global firms assessing all types of physical and transition risks. African companies, at 14%, are above the survey average in terms of identifying and measuring both physical and transition climate risks and second regionally, after Asia-Pacific (16%).
African countries are the most likely to assess climate risks – especially physical climate risks – since the continent is expected to be disproportionately impacted by climate change. This impact is already evident through increased instances of flooding and drought.
In fact, the survey found that Asia-Pacific, the Middle East, and Africa saw the highest increase in climate loss normalised as a percentage of revenue with average climate-related loss in Africa increasing by 0,2% from 1,9% in 2023 to 2,1% in 2024.
There is a strong local awareness that climate change poses significant risks to business operations and many companies are already experiencing its effects. As a result, businesses in the region are taking a more proactive approach to comprehensively identifying and measuring these risks – placing them ahead of other regions.
Over the next five years, companies globally plan to increase their investments in mitigation, adaptation, and resilience by dedicating an additional 16% of their capital expenditure budget to sustainability which amounts to an increase of $69-million per company. This helps mitigate climate risk for these companies, for example weather-proofing assets, while also enabling avenues for green growth – for instance, sustainable product lines.
Africa leads in adaptation and resilience investment with companies planning to increase their investments by an additional 18% of their capital expenditure budget over the next five years. Companies in the region are experiencing climate risks first-hand and, as a result, are placing greater emphasis on preparation measures such as addressing water scarcity and weather-proofing buildings.
“Around 70% of companies are maintaining, if not increasing overall their investments in sustainability,” says Hubertus Meinecke, the global leader for Climate & Sustainability at BCG and co-author of the report. “This is encouraging as it shows that climate action hasn’t stalled, and momentum continues steadily around the world.”
Commenting on the findings, co-author Hamid Maher, MD and senior partner BCG Casablanca, says: “African businesses are leading by example with 14% comprehensively measuring climate risks, which is well above the global average. This is a testament to the continent’s commitment to resilience and forward-thinking leadership, both of which are vital as Africa faces disproportionate climate impacts, yet also shows remarkable resourcefulness.”
Climate returns are materialising and driving action
According to the report, 82% of the global companies surveyed say they have captured economic benefits from decarbonisation – with 6% reporting a value that exceeds 10% of annual revenue; that is, a net value (after accounting for costs) of $221-million per company. These benefits are largely driven by revenue growth from sustainable products and operational savings from efficiency gains and resource optimisation.
Africa leads in capturing significant benefits from decarbonisation (11% of companies versus the survey average of 6%) and adaptation (7% of companies versus the survey average of 4%). Their investments in climate action are yielding tangible benefits, strengthening their position as reliable suppliers and generating greater value for their businesses.
Among global firms that assess both physical risks such as storms and rising seas and transition risks including policy and market shifts, the average projected financial exposure by 2030 is $790-million. Nearly half of the companies report that their climate risk adaptation efforts generate a return on investment of more than 10% – demonstrating that proactive preparation delivers real and measurable value.
“What matters most is that investment and action are accelerating – and our survey shows that companies are investing in climate action where there is a business case around strategic risk management and compelling financial returns,” says Diana Dimitrova, an MD and partner at BCG X and co-author of the report.
Advanced tools for turning climate goals into action
As companies scale up their climate investments and goals, they are also strengthening how they finance and operationalise climate action and increase their use of advanced governance mechanisms. The survey found that one-third of companies have implemented internal carbon prices and adoption of climate transition plans has risen five percentage points YoY – with 61% of plans now approved at the board level. These tools represent an important shift as companies are transitioning from broad aspirations to more operationalised climate strategies.
What sets leaders apart?
By making sustainability central to strategy, a small group of companies is realising financial benefits worth roughly 10% of their revenue. The report identifies four common enablers among companies that are generating the most financial value from climate action:
- Comprehensive emissions and risk measurement (1.4x more likely to achieve significant revenue).
- Quantification of impact through internal carbon pricing and risk modelling (1.6x).
- Adoption of transition and adaptation plans (2.2x).
- Use of multiple advanced digital solutions (2.3x).
African companies are using several advanced digital tools for mitigation: Generative AI (60%); AI agents (54%); predictive AI (48%); advanced computing (40%); Internet of Things (IoT) 36%; and AR/VR (34%). Additionally, they are using the following technology for adaptation and resilience: Generative AI (56%); AI agents (49%); predictive AI (46%); advanced computing (38%); IoT (37%); AR/VR (29%); earth observation (23%) and drones (19%).
“The companies that are really getting value from sustainability are the ones leaning into AI and advanced digital tools,” says Charlotte Degot, CO2 AI’s CEO and co-author of the report. “They’re using them over 10% more than their peers – especially to drive decarbonisation. And when companies layer multiple advanced solutions, they’re more than twice as likely to achieve real, significant benefits.”
Maher concludes: “It is encouraging to see African companies increasing their sustainability investments and leading globally in realising financial value from decarbonisation and adaptation. With 11% of firms reporting significant returns from climate action, the continent is proving that business growth and climate leadership can go hand in hand. By embracing digital tools and prioritising adaptation, African businesses are developing a blueprint for climate resilience and sustainable value creation.”