Climate Plans Need Workers, Not Just Disclosure

Corporate climate policy is entering a more disenchanted phase. The enthusiasm around net zero, disclosure, and transition plans is giving way to harder debates about costs, competitiveness, and implementation. In the United States, climate disclosure rules have come under direct attack. In Europe, sustainability reporting and due diligence rules have been weakened after intense political and business pressure. This is a serious setback.

Disclosure rules were never going to be enough. At their best, reporting requirements force firms to ask uncomfortable questions, gather information they would otherwise ignore, and make commitments visible to investors, regulators, and civil society. Yet the past decade has too often mistaken the external architecture of corporate sustainability — targets, ratings, reports, and commitments — for the internal processes through which companies actually change.

That implementation problem is becoming harder to ignore, even among voluntary initiatives. The Science Based Targets initiative’s Corporate Net-Zero Standard Version 2.0 now moves beyond target-setting by adding requirements on governance, transition planning, implementation, and continuous assessment. Attention is shifting from the credibility of targets towards the organisational capacity to deliver them. Addressing implementation is critical, because weak or inconsistent execution hands ammunition to critics who argue that corporate sustainability efforts fail to deliver meaningful results. Disclosure rules are not sufficient on their own, but they remain a necessary foundation.

Firms do not decarbonise by publishing better reports. They decarbonise by changing investment priorities, production systems, procurement, skills, and work organisation. Sometimes they must also confront the future of particular plants, of activities in certain regions, or of entire business lines. These choices create conflicts and trade-offs that technical expertise alone cannot resolve. They depend on whose knowledge counts, whose interests are represented, and how priorities are negotiated inside the firm.

This is where employees are often introduced too late. In many corporate climate strategies, employees appear either as a cost to be managed or as actors likely to block change once the essential decisions have already been taken. Unsurprisingly, they may respond defensively when transition means plant closure, outsourcing, or job loss.

Workers See What Boardrooms Cannot

Yet employees are not inherently anti-green. Their stance depends in part on whether they can help shape the process, find common ground with management and investors, and share responsibility for the outcomes. If climate strategy appears only as restructuring, employees will often defend existing jobs and sites. If they are involved while choices are still open, they can bring knowledge that is hard to see from the boardroom: where production processes are rigid, where skills are missing, where investments are credible, and where a climate plan will not survive contact with organisational reality.

Employees possess situated, experience-based knowledge of how materials, processes, and technologies work in practice, including their inefficiencies and unintended environmental effects. This makes them important experts in identifying and implementing more sustainable ways of working.

Our study of 56 large German companies, published in ILR Review, finds that employee voice can matter for environmental strategy. Germany is revealing because employees have formal channels of representation, including works councils and seats on supervisory boards. The broader point is that employee voice matters when employees have meaningful channels of representation and productive relationships with managers and shareholders around the long-term future of the company.

This can happen in four ways: by making the business case for environmental investment; by co-managing implementation, translating decarbonisation into new skills, routines, and production systems; by putting environmental issues on the strategic agenda; and by brokering compromises that connect emissions reduction with retraining, employment security, and investment in particular sites.

At Thyssenkrupp Steel in Duisburg, 12,000 steelworkers took to the streets in 2023 to demand that promised public funding for green steel be released. Their works council chairman, Tekin Nasikkol, argued that without investment in green steel, competitors elsewhere would take the customers and, ultimately, the jobs. Here workers were mobilising not to resist environmental change but to accelerate it.

At BASF’s Ludwigshafen site, the process has been quieter. A new agreement between management and employee representatives links the site’s “sustainable transformation” to continued investment, qualification, and protection against compulsory redundancies. BASF intends to invest around €2 billion a year there, while management and the works council have committed to reviewing implementation together. Here transition becomes something negotiated: changes in technology and organisation are tied to skills, investment, and the future of the site.

Accountability Has to Come From Inside

Our interviews show that these are not isolated cases but examples of recurring strategies through which employee representatives exercise influence on environmental issues. One union representative described this as finding the company’s “economic screw”: showing how lower resource use or less waste could also save money. Elsewhere, works council members were trained as “innovation promoters”, using their knowledge of production to identify changes that could make operations both more sustainable and more efficient. In another company, employee representatives pushed sustainability onto the supervisory board agenda by refusing to approve the following year’s business plan because it did too little to advance the transformation. Elsewhere again, they pressed for sustainability criteria in management board remuneration, arguing that commitments would carry little weight if executives had no incentive to deliver them.

Climate governance remains too external-facing. Investors ask about targets, regulators about disclosure, and campaigners about ambition. But this leaves another question open: who inside the firm has the authority, knowledge, and trust to make transition workable? External pressure still has to be translated into changes in investment, skills, and organisational practice, and firms need actors who can test whether commitments are realistic, identify obstacles to implementation, and ask whether managers are following through.

Rules and reporting can raise the level of declared responsibility without necessarily reducing irresponsibility. This is not an argument against rules. It is an argument against believing that disclosure can substitute for internal accountability and learning.

The next phase of corporate climate action will be harder than the last. Assets will lose value, jobs will disappear, and new skills and investments will be needed. These conflicts cannot be wished away by elegant reporting frameworks or by managerial optimism about innovation. They have to be governed.

The tragedy of weakened climate rules is that they may reduce pressure on firms without creating better ways to manage the transition. The answer is not to abandon disclosure but to connect it to how firms decide, negotiate, and implement change.

Climate targets need capital, technology, and regulation. But they also need employees who are involved early enough to shape the choices that affect them. The danger is not that employees have too much voice in climate strategy. It is that they are involved only after the future has already been decided.