Climate change reporting standards are insufficient and need to be expanded, experts say

A new paper from the Smith School of Enterprise and the Environment at the University of Oxford finds that current climate standards do not provide enough incentives to drive the broader innovation needed to achieve net zero emissions, and must be expanded to include a company’s broader impact on climate action. The peer-reviewed research, published in Carbon dioxide emission management, comes after a period of fierce public debate on climate standards and presents possible solutions for those seeking to improve both the integrity and impact of corporate climate action.

Encouraging climate action and innovation in the corporate world is essential, says co-author Dr Matilda Becker: “Of the 2,000 largest companies, almost half still do not have a net zero target, while some go further without reward. We need to encourage companies to take action beyond their boundaries.”

The authors discuss actions that companies can take to accelerate the global transformation to net-zero emissions across three spheres of influence: product power, purchasing power, and political power, and propose an additional reporting path to capture their influence in these areas. This path would show a company’s broader contribution to global net-zero emissions, and examples could include lobbying for cleaner energy systems or signaling financial support for new net-zero technologies.

To date, corporate climate standards have been created primarily to help companies set goals (e.g., through the Science Based Targets initiative) and help them track their own emissions from their operations (e.g., through the Greenhouse Gas Protocol). While these standards have been essential to reducing individual companies’ emissions, the authors argue, they do not encourage broader climate action and may even discourage it.

“It’s essential that companies report on and reduce emissions across their value chains,” says co-author Claire Wigg, head of the Climate Performance Practice at the Exponential Roadmap Initiative. “But it’s equally essential that they drive — and are rewarded for driving — systemic change through the products they make, the purchases they make, and the policies they lobby for or against.”

“The way standards are currently set, a high-growth renewable energy company can fail because of the emissions it generates during the production of turbines and solar panels, even though these products can help reduce emissions globally,” explains lead author Kaya Axelsson, a researcher and head of policy and partnerships at the Smith School. “We need a way to compare and reward companies that change the world, not just their business.”