Corporate Decarbonization Strategies and Carbon Accounting Standards: Implementation Learnings to Inform Standard Revisions

Holly Lahd^*

• Watt & Ton LLC, Minneapolis, United States

The corporate commitment to reducing greenhouse gas (GHG) emissions has gained significant traction, with over 11,000 companies committing to reduce their corporate emissions, measured using the GHG Protocol corporate accounting standards. This paper critically examines two prevalent corporate climate strategies: renewable energy power purchase agreements (PPAs) and supplier engagement initiatives, highlighting their alignment with existing carbon accounting standards and company implementation considerations around internal approval processes, business operation impacts, and transaction costs. The analysis reveals that while PPAs are often favored due to their clear recognition in accounting standards and minimal impact on core business operations, they still face rising costs and complexity. Conversely, supplier engagement programs, despite their endorsement by initiatives like the Science Based Targets Initiative, struggle to deliver Scope 3 inventory reductions emissions due to mismatched data and high transaction costs. The paper underscores the necessity for corporate climate standard setters to consider the realities of company accounting and decarbonization strategy practices as standards undergo major revisions. By integrating these implementation considerations, the effectiveness of voluntary GHG emissions accounting and target-setting systems can be enhanced, ultimately contributing to more significant reductions in atmospheric emissions.