To Incentivize Companies to Address Climate Change, Measure Their Broader Impact

Current climate reporting focuses primarily on reducing carbon emissions within companies’ direct operations and value chains, often overlooking the broader impact businesses can have on society. This narrow approach fails to recognize or reward companies for their innovative contributions to climate solutions beyond their immediate emissions, such as developing green products, influencing policy, or investing in sustainable initiatives. To better mobilize businesses as agents of systemic change, new reporting frameworks should be introduced, allowing companies to highlight and be rewarded for their broader societal contributions. This could reignite enthusiasm for climate action, particularly among innovative and entrepreneurial firms, while also addressing the risk of greenwashing by providing clear guidelines for credible impact reporting.