The Problem with ESG Target Setting: Overcoming the Supply Chain Black Hole
This blog is part of a series published by Elizabeth Pulos, head of compliance, sustainability, and traceability innovation, and leader of Inspectorio’s Center of Excellence.
Sustainability commitments have been a mainstay of our industry for years. From “50% certified recycled materials by 2025” to “net-zero by 2040”, brands have long been making bold ESG promises with the hope of driving progress through ambitious public-facing goals and campaigns.
At first glance, this seems like progress. But behind the scenes, many of these targets are set without a comprehensive understanding of supply chain realities. Instead of being grounded in operational feasibility, they are often marketing-driven; designed to inspire and focus internal teams, and satisfy external stakeholders all while sweeping the Scope 3-sized elephant in the room under a rug.
The result? Unattainable targets and reputational risks when companies inevitably fall short. Instead of helping us improve our supply chains, ESG goal-setting is turning into a theoretical exercise that, unfortunately and unintentionally, lacks impact.
Why ESG Goals Fail: The Supply Chain Black Hole
One of the biggest challenges in sustainability target setting is the supply chain “black hole”—a tangled web of tiered suppliers that obscures how materials are sourced, how emissions are measured, and what’s actually possible at the facility level.
This leads to four major pitfalls:
- Goals Without Feasibility: Brands commit to ambitious sustainability targets before understanding if they can be achieved at scale.
- Narrative-led Data Analysis: Instead of guiding decisions, ESG data is sometimes interpreted specifically to confirm pre-set goals.
- Reactive vs. Proactive Adjustments: Companies set goals first, then scramble to adjust them later when they prove to be unrealistic.
- Regulatory & Reputational Risks: With governments and courts now requiring verifiable ESG disclosures, companies face increasing scrutiny over unsubstantiated claims.
Take the example of the brands that set ambitious recycled polyester targets, only to later be called out for greenwashing because:
- Polyester sheds environmentally damaging microplastics
- Textile recycling at scale does not yet exist
- They have difficulty demonstrating and validating recycled content along the value chain.
These brands had to quietly revise their strategies, goals, and supply chain partners, eroding trust with stakeholders and incurring substantial legal and operational costs along the way
Across industries, sustainability professionals are stuck in a similar cycle of setting targets first and confirming viability later—and it’s coming back to haunt us.
Want to Set Realistic, Impactful ESG Goals?
Understanding global compliance requirements is crucial for setting achievable sustainability targets, and so is access to real-time traceability data. Register for our upcoming webinar to learn how you start on the path of impactful ESG target-setting.
The Growing Pressure for ESG Data Integrity
Historically, companies could get away with vague or inflated sustainability claims. But new regulations are changing the game:
- Mandatory Scope 3 Disclosures: Companies must now account for emissions across their entire supply chain, not just their direct operations.
- Greenwashing Laws: Brands must prove their sustainability claims or face legal consequences.
- Investor & Consumer Scrutiny: Stakeholders are demanding auditable, science-based ESG targets.
This is a seismic shift. The companies that fail to align sustainability commitments with supply chain realities will face increasing regulatory fines, loss of consumer trust and market access, and substantial legal action.
Setting ESG Goals That Actually Work
So how can companies set ambitious yet achievable sustainability goals?
Here’s how:
- Understand Supply Chain Realities Before Committing: Work with suppliers to determine what’s operationally possible.
- Invest in Supply Chain Visibility: You can’t improve what you can’t see. AI-powered supply chain management platforms help track ESG performance in real time.
- Embrace Continuous Improvement Over Perfection: It’s better to set incremental goals than to overcommit and later revise targets.
Ambitious sustainability goals are important—but they must be rooted in value chain realities. Start with understanding your supply chain—use new technologies like AI if you can—and use that as a launching pad for truly achievable and impactful goal setting for your brand.
Next in the Series: The Shift from Marketing-Led to Supply Chain-Led Sustainability
In the next blog, I’ll explore why sustainability teams are shifting from marketing-driven storytelling to supply chain-led, data-based operational strategies—and why this is critical for long-term success.
About Elizabeth Pulos
Elizabeth is the head of compliance, sustainability, and traceability innovation at Inspectorio. As the leader of Inspectorio’s Center of Excellence, she fosters innovation and drives best practices in supply chain sustainability, compliance, and traceability among brands, suppliers, and technology vendors.
Before joining Inspectorio, Elizabeth was the director of global sustainability at Converse (Nike Inc.), served as Macy’s sustainability and social responsibility lead, and directed the compliance factory certification program at Worldwide Responsible Accredited Production (WRAP).
Register for our upcoming webinar with Liz Pulos, Head of Compliance, Sustainability, and Traceability Innovation to start on the path of impactful ESG target-setting.
