SCALING UP PRIVATE SECTOR ACTION ON CLIMATE CHANGE

The document argues that current corporate GHG accounting often conflates physical inventories with market-based performance accounting, leading to opacity and lackluster climate finance. By analyzing the Paris Agreement's architecture—which strictly separates national physical inventories from market-based 'emissions balances'—the authors propose a more robust corporate framework. Key recommendations include adopting dual-ledger reporting, establishing governance bodies for accreditation of market instruments, and implementing standardized biennial reporting to track annual progress toward net-zero targets rather than focusing solely on a single target year.

• There is a significant gap between corporate net-zero commitments and actual climate finance; while the number of companies committed to Science-based Targets initiative (SBTI) targets grew by over 500% since 2018, annual corporate climate finance payments increased by only 5%, from $183 billion to $192 billion per year.
• The Paris Agreement maintains environmental integrity by separating physical GHG inventories (which track actual emissions within territorial boundaries) from 'performance accounting' (which tracks the use of market-based mechanisms and Internationally Transferred Mitigation Outcomes), thereby preventing the conflation of market-based achievements with direct inventory reductions.
• Corporate GHG accounting currently lacks the clear separation found in the Paris Agreement, often using a 'hybrid approach' that integrates physical accounting and market mechanisms under a single quantity, which creates opacity regarding the relative roles of physical reductions and instruments like Renewable Energy Certificates (RECs).
• The Paris Agreement's approach to single-year targets ensures that market-based cooperation does not lead to a net increase in emissions by requiring 'corresponding adjustments' for every year of the implementation period, ensuring that target-year results represent action taken over time.
• The authors identify several critical gaps in the corporate framework, including the need for a respected governance body to certify market-based standards, the adoption of standardized reporting templates to enhance comparability, and the requirement of a comprehensive inventory as a prerequisite for accessing performance-based accounting ledgers.
• Existing corporate platforms using market-based accounting, such as the Sustainable Aviation Buyers Alliance (SABA), demonstrate the potential to mobilize significant capital, but are hindered by a lack of clarity in the net-zero ecosystem; one platform estimates that existing rules have blocked over $450 million in corporate climate finance.

APA

Hood, C., Prag, A., & Pritchard, L. (n.d.). SCALING UP PRIVATE SECTOR ACTION ON CLIMATE CHANGE. We Mean Business Coalition. https://www.wemeanbusinesscoalition.org/wp-content/uploads/2024/09/WMBC_GHG_Accounting_White_Paper_Final.pdf

Chicago

Hood, Christina, Andrew Prag, and Luke Pritchard. SCALING UP PRIVATE SECTOR ACTION ON CLIMATE CHANGE. We Mean Business Coalition, n.d. https://www.wemeanbusinesscoalition.org/wp-content/uploads/2024/09/WMBC_GHG_Accounting_White_Paper_Final.pdf.

Wikipedia

{{cite report |last1=Hood |first1=Christina |last2=Prag |first2=Andrew |last3=Pritchard |first3=Luke |title=SCALING UP PRIVATE SECTOR ACTION ON CLIMATE CHANGE |publisher=We Mean Business Coalition |url=https://www.wemeanbusinesscoalition.org/wp-content/uploads/2024/09/WMBC_GHG_Accounting_White_Paper_Final.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{hoodndscaling, author = {Hood, Christina and Prag, Andrew and Pritchard, Luke}, title = {{SCALING UP PRIVATE SECTOR ACTION ON CLIMATE CHANGE}}, institution = {We Mean Business Coalition}, url = {https://www.wemeanbusinesscoalition.org/wp-content/uploads/2024/09/WMBC_GHG_Accounting_White_Paper_Final.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }