Since the adoption of the Paris Agreement nearly a decade ago, Net Zero commitments, which aim to reduce greenhouse gas (GHG) emissions to near zero, have become standard across the corporate world, driven by regulatory pressure, investor and customer expectations, and risk mitigation. Yet despite bold pledges, progress toward 2030 Net Zero targets remains slow and uneven. The risks of not meeting targets include increased global warming, resulting in more frequent and severe weather events and other negative impacts to human livelihoods and ecosystems.

What is holding back progress?

One critical factor that may be overlooked in turning ambition into meaningful action at companies is robust internal governance. Clear ownership, aligned incentives, and consistent oversight are the backbone of operationalizing a successful Net Zero strategy.

Here are some of the key considerations for sustainability leaders to build this strong governance foundation:

Co-Create a Net Zero Strategy with Key Stakeholders
Before designing governance, align with the Net Zero strategy itself. Engaging cross-functional stakeholders early through a materiality assessment or broader ESG strategy refresh helps identify internal champions and secure their buy-in for a company’s climate program. This collaborative process lays the groundwork for developing the roadmap, setting goals, implementation, and performance tracking. Identify which teams manage business activities that contribute to Scope 1, 2, and 3 emissions, e.g., facilities, procurement, or supply chain. Which teams can help implement solutions, such as renewable energy procurement? From the start, co-create a strategy with team members who will likely be accountable for executing it.   

Establish Clear Ownership and Roles
Effective governance doesn’t need to be complex, especially in the early stages. What matters most is clarity. Key questions to guide ownership design include:

1. Who owns the climate strategy? It could be a head of ESG & Sustainability or someone else on the ESG team with climate in their scope of responsibilities. Clarify which C-suite leader sponsors their work and is ultimately accountable, e.g., Chief Legal Officer or Chief Operations Officer.  
2. Which functions should partner on these initiatives? Teams such as operations, real estate, procurement, engineering, product design, and IT often play a direct role in emissions reduction — think renewable energy purchasing, energy efficiency projects at offices or manufacturing sites, or supplier engagement. Ideally, these teams were involved in strategy development. Once the strategy is approved, provide clear expectations on their ownership role, such as attending monthly working group meetings, providing reporting on key metrics, implementing roadmap actions, and more. 
3. What is the board’s role? Collaborate with your legal team or corporate secretary to embed climate oversight into board governance. For public companies, this can often fall under the Nominating & Governance Committee or a dedicated ESG subcommittee. Embed clear responsibilities for oversight in the committee charter.  Also consider the frequency of providing updates, e.g., quarterly.

Build Cross-Functional Accountability Structures
Once clear roles are in place, set up structures to ensure coordination and sustained progress. Basic examples include the following:

• Working Groups: Form a cross-functional climate working group (or broader ESG group), including key strategy implementation partners. Keep the group lean, focused on those critical to the Net Zero roadmap. Set a cadence for regular meetings to share ongoing progress, address challenges, and foster collaboration.
• Executive Steering Committees: Create an executive-level ESG or climate-focused steering committee that guides strategic direction and oversees the performance of the working group. Their engagement sends a powerful signal across the organization.
• Green Teams or Employee Networks: While optional, employee-led groups can be catalysts, especially when encouraged to drive initiatives that reduce emissions at the site, team, or community level.

Depending on the complexity of the company’s industry and climate strategy, there may be a need for other supporting groups. For example, there could be sub-teams or working groups for Scope 3, carbon disclosures and regulations, or climate risk.

Link Climate Goals to Compensation
Few levers are more powerful than pay. Tying climate performance to executive or employee incentives reinforces accountability and communicates seriousness — both internally and externally. A 2024 Wall Street Journal article, “How to Make Climate Progress: Tie it to CEO Pay,” highlighted important perspectives, including ensuring performance metrics are science-based, measurable, achievable, auditable, and tied to the business model and strategy.

While embedding sustainability metrics into executive compensation may seem daunting, more and more companies are doing it. According to KPMG research conducted in 2024 of 375 large public companies, 78% link executive compensation to ESG performance. Specific climate change-related targets included in executive remuneration typically refer to reductions in GHG emissions. Other frequently used targets include net zero achievement, energy consumption, share of renewable energy use, and others. 

For example, Bank of America’s executive officer team’s performance dashboards include sustainability metrics, which are reported to the Board. The Board reviews progress toward the company’s Net Zero goal to evaluate pay-for-performance. At Shell, 15% of senior management and the majority of employees’ annual bonus is tied to Shell’s progress in the energy transition, which includes selling lower-carbon products, reducing operational emissions, and partnering to decarbonize operations.

To explore this approach at your company:

1. Understand how compensation decisions are made (e.g., board involvement, current incentive structures).
2. Research how peer companies integrate climate metrics into compensation.
3. Identify internal champions, such as the Chief HR Officer and Chief Legal Officer, and seek their feedback, guidance, questions, and concerns.
4. Recommend measurable, material metrics (e.g., GHG reduction, energy efficiency improvements, % renewable energy use).

Even modest integration, such as a small portion of annual bonuses tied to climate KPIs, can be drivers to shift behaviors and encourage ownership across the organization.

Takeaways: Governance as a Catalyst for Net Zero

• Engage early and often. Collaboratively develop your climate strategy with those who will implement it.
• Assign clear roles. Identify a climate strategy owner and secure functional partners who influence emissions to help execute the strategy and track progress.
• Set up accountability mechanisms. Use cross-functional working groups and executive steering committees to drive action and get executive-level strategic guidance.
• Incentivize action. Explore tying compensation to climate performance as a signal of accountability and ambition.

To make Net Zero commitments real, governance is not just an operational tool — it’s a strategic enabler. While there’s no one-size-fits-all model for Net Zero governance, and it’s only one of several aspects needed to achieve success, prioritizing governance must be a part of any thoughtful strategy.

Sandy Eapen is a Sustainability Advisor & Fractional Leader with 20+ years of experience across corporate, public, and nonprofit sectors. She helps organizations develop and implement sustainability strategies that create business and stakeholder value. She is also an Executive Success Coach for UT Austin’s Sustainability Leadership Program and an ESG (environmental, social, governance) instructor at UT Arlington.

Previously, as Head of Sustainability and ESG at Coupa Software, Sandy launched the company’s ESG program, leading strategy, stakeholder engagement, and reporting. She oversaw Coupa’s climate strategy, achieving 100% renewable energy, establishing a Net Zero commitment, and fostering partnerships with solution providers. As a sustainability consultant at BSR, she co-led the initial work, along with partner organizations, to establish the Renewable Energy Buyers’ Alliance. She has also held roles at American Express, the UN, BearingPoint, and at Dow, where she led major energy efficiency manufacturing projects.

Sandy is the Founding President of the UT-Austin Sustainability Alumni Network, sits on the LoveATX Advisory Council for Keep Austin Beautiful, and serves on the board of Asian Family Support Services of Austin. She holds an MBA and a Master of International Affairs from Columbia University and a B.S. in Chemical Engineering from UT Austin.