When climate executives and policy leads gathered at the Watershed Summit in San Francisco last month, the goal wasn’t to share progress. It was to confront friction. Hosted by climate software firm Watershed, the event came as companies face growing pressure to turn the sustainability promises of the past into real sustainability progress today. With tightening regulations, rising energy demand, and unstable supply chains, the organizers say, the pressing question now is whether the bold promises of climate strategy can survive the real world.
In the past decade, thousands of companies aligned with frameworks like the Science Based Targets initiative, making net zero commitments to cut climate emissions. But progress has been uneven. Scope 3 emissions—those tied to suppliers, customers and downstream use—remain especially difficult to track and reduce. While companies have gotten better at measuring, recent experience shows that few have succeeded in driving significant reductions.
That reality is starting to shift. Regulations like the European Union’s Corporate Sustainability Reporting Directive and California’s SB 253 require companies to measure and disclose emissions with far more detail than ever before. Firms are now being judged not by what they hope to do, but by what they are doing—and how quickly they are learning to adapt.
Watershed, whose clients include Spotify, Airbnb, and Walmart, helps companies track emissions, design reduction plans, and prepare for disclosure. But more often now, its work involves helping clients build the systems and strategies needed to act.
“Sustainability used to be a branding exercise,” said Anna Cerf, Head of Policy Product at Watershed. “Now it’s about how you actually shift business practices, how you source clean power, prepare suppliers, and navigate incomplete policy.”
That shift is not easy. Some companies still hesitate, citing uncertainty around emerging rules. Others discover that cutting emissions does not automatically lower climate risk. Cerf explained that the two are connected, but not directly. “Most firms won’t reduce their risk just by emitting less. But by understanding how to decarbonize, they uncover new ways to manage exposure. That is why policy needs to reward action, not just transparency.”
Emma Cox, a sustainability analyst at the summit, pointed to a major barrier. “Many smaller suppliers don’t have the tools or teams to do this work,” she said. “If large companies want real change, they will need to invest in the capacity of their partners.”
Some already are. Companies are creating internal carbon pricing systems, training procurement staff, and modeling climate risk scenarios. Sustainability teams are shifting into operations and finance. The focus is no longer just setting goals—it is learning how to meet them.
Dr. Steve Davis, a Stanford Earth system scientist and Chair of Watershed’s Science Advisory Board, delivered a clear challenge: “If our systems can’t decouple emissions from economic growth, we’re not on a sustainable path.” To achieve that, he emphasized, companies must be resilient in their path toward lowering emissions, staying focused and adaptive even amid regulatory shifts, economic pressures, and policy uncertainty.
The Watershed Summit made one thing clear: in the race to decarbonize, ambition sets the pace, but resilience sets the finish line. As Davis closed, “It’s no longer enough to be ambitious. We need to be resilient, too.”
