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Brief | 2023

Accounting for Impact

By Charles CannonNicole LabutongWenjuan LiuLachlan Wright
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The climate clock is ticking fast. Increasing temperatures have called for more ambitious emissions reduction goals. The latest report from the United Nations’ Intergovernmental Panel on Climate Change calls for more ambitious near-term 1.5°C goals and reduction actions.

Yet corporate carbon accounting practices still focus largely on assignment of emissions and less so on assessing the impact of climate action. As focus increasingly shifts from making ambitious targets to implementing them, companies have turned to novel business models for emissions reduction, some of which critics doubt have much real-world impact.

This insight brief details the importance of consequential accounting methods in evaluating and incentivizing a company’s emissions reduction efforts and demonstrating progress toward climate targets.