Fig. 4: Differential behaviour can explain alignment with climate targets.

Panel a and b show the excess sustainability effort of companies with emission pathways aligned with the climate targets. The excess effort is the difference in the relative incidence of activities and SDG in the two populations. Blue (red) bars indicate activities and SDGs that are more prevalent in the aligned (misaligned) population. Panel c shows the estimation of the association of the total number of initiatives in negative (red) and positive (blue) excess effort with the magnitude of the deviation and the probability of alignment. The model number on the leftmost column in the table corresponds to the incremental addition of control factors as in Fig. 3 panel d. In each model, we control for fixed effects, source of emission data, self-selectivity, and we adjust standard errors for heteroskedasticity. *, **, *** denote statistical significance at 10%, 5%, and 1%, respectively, calculated from the two-tailed p-values for the t-statistics of the parameters. Overall, the figure shows that companies with emissions pathways aligned with climate goals focus on behaviours that prioritise innovation and stakeholder engagement activities to realise SDG 7 and that this differential behaviour can explain alignment with climate targets.