Companies worldwide claim they’re reaching the zero-emissions target. However, scientific results say it’s still not enough, as the results are not… true.
Many of the world’s largest companies are declaring breakneck progress in the fight against climate change — on paper, at least. But these gains often fail to materialize in the atmosphere. The companies are relying on a common, but controversial, form of climate bookkeeping known as “market-based accounting.” This allows businesses to buy credits from clean energy providers to say they’re running on green power when they actually aren’t, wiping from their ledgers vast quantities of pollution caused by the electricity powering their offices, data centers, and factories.
Businesses typically purchase their power from local electric grids, which are supplied by a mix of sources—everything from zero-emission wind turbines to sky-choking coal plants. Once power plants feed electricity into the grid, it becomes intermingled like water in a mountain lake fed by different streams. It’s impossible to know which plant supplied the power running a company’s assembly lines, so they’ve traditionally calculated their emissions using the average pollution of the local grid’s energy mix. This is known as “location-based accounting.”

“Market-based accounting just ruins the accuracy of greenhouse gas disclosures,” says Matthew Brander, a senior lecturer on carbon accounting at the University of Edinburgh.
An investigation by Bloomberg Green, found that at least 1,318 companies employed market-based accounting to erase a combined 112 million metric tons of emissions from their records, the equivalent to the annual pollution from 24 million cars.
Despite some results being real, the goals were achieved because hundreds of comapnies rely on certificates known as renewable energy credits (RECs) or guarantees of origin (Gos) to achieve their climate goals.
The accuracy of how companies account for the emissions is a key matter when fighting the climate crisis. One-quarter of the planet’s heat-trapping emissions are caused by the production of electricity and heat, with two-thirds of that being from commercial and industrial customers.
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