Purpose This study assesses climate key performance indicators (KPIs) within Tasmanian local government councils, examining their varied organisational capacities and institutional demands. It aims to understand how local governments address climate change demands amid evolving national and global climate governance. Design/methodology/approach This study used semi-structured interviews with 21 senior council leaders and sustainability consultants experienced in the Tasmanian councils. Institutional theory, through coercive, normative, and mimetic pressures, served as the theoretical basis for examining variations in climate-performance indicators among councils. Findings This study delineated four key performance indicators used by Tasmanian councils to evaluate climate initiatives: emissions reduction targets, risk and adaptation planning, waste reduction, and leadership and strategic climate positioning. The study found five factors driving KPI variation among councils: emission baseline differences, asset management, resource capacity, waste service models, and infrastructure. These findings demonstrate how institutional pressures and structural limitations affect climate performance outcomes across sectors. Practical implications This study provides insights for policymakers and regulators to advance climate initiatives by demonstrating how organisational constraints affect KPI adoption, enabling better climate-reporting frameworks and guidance for resource-limited councils. Social implications Given the pivotal role of local governments in climate governance, enhancing KPIs has implications for community resilience and sustainability. This study shows the initiatives of Tasmanian councils to embed climate leadership within governance frameworks despite structural obstacles. Originality/value This study addresses the gap in scholarly attention to climate KPIs in the context of small and regional local government. Using institutional theory to explore climate KPIs, it examines coercive, normative, and mimetic pressures in diverse public-sector settings.