Is impact out of scope? A call for innovation in climate standards to inspire action across companies’ Spheres of Influence

Abstract

Today’s global net-zero governance landscape fails to recognize some of the most important strategic actions companies can take to mitigate climate change. Standards have been built primarily to guide companies in setting targets (e.g. through the Science Based Targets initiative) and to help companies’ track emissions reductions in their annual inventories (e.g. using the Greenhouse Gas Protocol). As guidance is updated, debates have arisen about how companies can report efforts to reduce wider emissions in society (such as carbon credits purchased and avoided emissions from the use of products). In response, we review how a focus on emissions reductions within the value chain is critical but insufficient for recognizing and rewarding the full scale of opportunities companies have for changing wider systems. In addition to inventory reporting and target setting across the greenhouse gas ‘Scopes’, a second reporting track is needed to compare and reward companies’ efforts across their ‘Spheres of Influence’. This article presents a framework offering a meaningful and separate place for companies to report efforts to leverage (a) their products, to empower others to avoid emissions; (b) their purchasing power and (c) their policy advocacy. Recognising and thus rewarding entities’ dedication to broader societal interventions will be critical for achieving an economy-wide transition to global net zero.