There’s a big fight over the future of how companies set climate targets and show progress toward them. How these rules unfold will shape the approach companies take toward the climate transition and, by extension, influence the way they allocate billions in capital.

But first, the organizations in charge of defining the rules of the road have to get the language right. 

It took only a few minutes of conversation last week with David Kennedy, the head of the Science Based Targets Initiative (SBTi), for him to take issue with my word choice. The leading standard-setting organization was days away from announcing its new corporate standard, and I asked about how it would create “flexibility” for companies. Kennedy rejected the word. “It's not flexibility in that kind of pejorative sense,” he says. “It is providing options.”

It was a telling exchange. Over the last few years, the world of emissions standard setting has become increasingly contentious, so much so that even a few words can trigger a fight about whether companies are getting off the hook or being held to account. 

And yet behind the semantic debate are important decisions that will shape the future of corporate climate action. Founded in 2015, SBTi has come up with key ideas that have migrated into government regulation of corporate climate work, and its guidance has become a North Star for companies looking to decarbonize. That trusted guidance is even more important today as businesses move from setting lofty long-term goals to implementing short-term solutions in their operations and supply chains. By extension, SBTi guidance is an important indicator of where the puck is moving, shaping investment decisions across the thousands of companies that follow its guidance.   

Maintaining that influential position requires threading a needle. SBTi needs to maintain sufficient buy-in from companies, which are often wary of stringent standards, while keeping on board policymakers and climate advocates that demand more ambition. (Indeed, a group of NGOs criticized the new SBTi framework, released June 11, as insufficient.) Kennedy described the new standard as sitting in a “sweet spot.” It’s “on the one hand aligned with commercial objectives,” he says, and on the other it allows companies “to make contributions to international climate objectives.” 

SBTi’s new corporate guidance is an attempt at navigating the tension. Kennedy argues that it does not lower ambition, even as it gives companies more tailored ways to show progress. It outlines sector-specific pathways for cutting supply chain emissions. It emphasizes in-depth transition planning over simple goal setting. And it offers guidance for companies that want to use market-based instruments to reduce emissions outside of their direct operations. 

The standard covers wide ground in significant detail. It assesses companies not based on whether they say they want to hit net zero but whether they’re actually incorporating climate thinking into their operations. While following SBTi guidance is voluntary, the move is a good indicator that this is the new measure of climate success for any business. “It reframes net-zero transition as a continuous improvement journey rather than a point in time,” says Kennedy. 

For the uninitiated, reading the new corporate standard can feel like jumping into the obscure. And yet the specifics laid out over nearly 100 pages will have both immediate and long-term effects in how companies understand climate action. 

One example is how SBTi suggests companies should calculate their use of clean energy. Power market experts have debated whether companies should match their power consumption with clean energy generation on an hourly or annual basis. The latter approach became commonplace under SBTi’s first standard. And matching on an annual basis has helped seed the market for companies purchasing renewable energy. But some experts and companies now complain that it doesn’t reflect actual usage. SBTi leaves annual matching intact as a baseline while opening the door to hourly matching.  

SBTi has also created “best efforts” provisions that cut companies slack if they miss their targets due to circumstances beyond their control. “It may be for reasons beyond your control as a company that there is a gap between performance and targets,” Kennedy said. “And then we say be transparent, don’t pretend that there isn’t a gap.”

Finally, SBTi’s treatment of “market-based measures” offers an attempt to move beyond the stalled debate over carbon offsets. The new guidelines don’t dismiss these tools, but instead create a clear-cut hierarchy. Companies should first do what they can to cut emissions from their own operations. Then, they should focus on emissions reduction in systems they rely on (think of an airline helping fund the creation of a sustainable aviation fuel ecosystem). Separately, high-integrity offsetting remains a last-resort solution but doesn’t erase the obligation to decarbonize. This is complex, but it should signal a continued market for many low-carbon solutions.  

What’s the signal out of all of this? The future of corporate climate efforts will continue, but as SBTi makes clear: Merely setting targets isn’t enough. To be credible requires actually incorporating climate into strategy and operations. 

To get this story in your inbox, sign up to TIME's Future Proof newsletter here.

If you feel like things have been getting more expensive, you’re not imagining it. The average American household spent $15,400 more for basic necessities in 2025 than it did in 2019, according to research from the Common Sense Institute, a non-partisan research organization. That’s across a number of spending categories. On average, grocery costs increased 25.1%, while shelter and utilities costs increased 33.9%. 

There’s a number of explanations for the surge in prices—from pandemic induced supply chain issues, to tariffs, to wars in Ukraine and Iran.

Yet a significant number of Americans are also pointing to another factor: climate change. In a study released this week by the Yale Program on Climate Change Communication and the George Mason University Center for Climate Change Communication, 67% of American voters said they think global warming is affecting the cost of living in the United States, while 64% said it is affecting their own cost of living, pointing to increasing costs of home utility bills, groceries, and home insurance, among other things. 

They’re not wrong. Extreme weather driven by climate change is pushing up prices for everyone. One April paper published by Brookings Papers on Economic Activity found that climate change is already costing U.S. households between $400 and $900 a year, on average. 

The biggest expense many are seeing is insurance as companies face an increase in the number and severity of insurance claims, leading to rising premiums and fewer plan options. The researchers estimate climate change contributed to an average $360 increase in homeowners’ insurance premiums between 1990 and 2023.

“Even if you don't live in tornado alley, you might be seeing your insurance rates go up to cover the cost for people who are in the more danger-prone areas,” says Catherine Wolfram,  professor of applied economics at the MIT Sloan School of Management and one of the study’s authors. 

Utility rates are also going up. Residential electricity costs have risen by almost 40% since 2021 and residential gas costs have increased by 40% since 2019— outpacing inflation. 

That’s in part due to the cost of responding to natural disasters. “There are these more and more frequent storms that go through and wipe out the utility poles, and the utility rates eventually have to go up to pay for that,” says Wolfram. 

Not to mention that warmer weather also means more A.C. and higher electricity bills. “People are just paying more for air conditioning,” says Wolfram. 

A rapid rollout of clean energy technologies—like solar panels and wind— is one way governments can both make energy costs more affordable and bring down the cost of living, according to the International Energy Agency. The Trump Administration, however, is moving in the opposite direction—investing millions in keeping struggling coal plants alive despite little economic benefit.

Climate change is also driving up the price of groceries, with one estimate finding that climate change has raised the price of food in the United States by up to 6.7% over the past 50 years. Extreme weather fueled by rising global temperatures can damage crops, reduce yields, and disrupt supply chains—leading to higher prices in the grocery store. “With things like fresh produce coming from other countries, if you have an extreme weather event that is being made more intense and more frequent by climate change, it damages crops, and therefore reduces the availability of produce. That usually is then reflected in an increased price,” says Bob Ward, policy and communications director for the Centre for Climate Change Economics and Policy at the London School of Economics. 

To better plan for climate impacts, Ward notes that our global food system should be more diverse, to allow for potential shortfalls. 

“We might be able to mitigate some of those impacts by being better at making sure we have more diversified supply chains, so that if one particular geography is hit by an extreme weather event, it is possible to replace it with supply from other regions,” says Ward. However, that’s easier said than done, he notes. “We're used to having the agricultural systems and food production systems that are largely built to deal with a stable climate, and an unstable climate is a much more difficult and expensive business.”

If your wallet is looking for relief, experts warn it might not come easily. “It's only going to get worse as climate change gets worse, as the summer days get hotter, as the storms get more frequent,” says Wolfram. “It's going to be worse in the future, but it's already here.”