Question:
You are given the full text of a scientific research paper.

    Summarize the **research methods** used in the study in a way that is informative for policy audiences. Your response should:
    - Describe the overall study design, data sources, tools, and models used
    - Avoid unnecessary technical details or equations
    - Use accessible but precise language

    Write a short paragraph suitable for the “Scientific Research Study Methods” section of a policy brief.

    Scientific Research Paper:
    Articles
https://doi.org/10.1038/s41558-022-01379-5
1Department of Management, John Molson School of Business, Concordia University, Montréal, Quebec, Canada. 2Department of Geography, Planning and
Environment, Concordia University, Montréal, Quebec, Canada. 3Loyola Sustainability Research Centre, Concordia University, Montréal, Quebec, Canada.
4Centre for Business, Climate Change and Sustainability, University of Edinburgh Business School, Edinburgh, UK. ✉e-mail: anders.bjoern@concordia.ca
T
here is increasing focus on the role of the private sector in
meeting global climate goals1–3. To this end, science-based
targets (SBTs) intend to align voluntary company-level emis-
sion reduction targets with the global temperature goal of the Paris
Agreement4–6. So far SBTs have been set by more than 1,000 com-
panies, including many multinationals7,8. When reporting scope
2 emissions, that is, emissions associated with the generation of
purchased energy (primarily electricity, but also including steam,
heat and cooling), the Science Based Targets initiative (SBTi) allows
companies to use renewable energy certificates (RECs) to claim
the use of renewably generated electricity. Companies can then
report zero emissions for each unit of electricity consumption cov-
ered by purchased RECs9, regardless of the actual emissions pro-
duced by the electricity grid at their location; however, RECs do
not reflect the physical electricity flow supplied to the companies
purchasing them10, and there is evidence that RECs are unlikely to
lead to additional renewable energy generation11–18. Consequently,
company-level emission reductions reported through RECs are
unlikely to reflect real reductions of global emissions, which has
the potential to compromise the alignment of SBTs with the Paris
temperature goal19,20. In recognition of this issue, several emis-
sion accounting standards21,22 restrict or do not endorse the use of
RECs, but RECs are nevertheless permitted by the Greenhouse Gas
Protocol9 that forms the basis of SBTi’s requirements.
Here we combine information about SBTi-certified company
emission reduction targets with data on REC purchases to assess
the effect of RECs on the alignment of companies’ reported scope
2 emission trajectories with the Paris temperature goal. We use the
climate change disclosures of 115 companies, which represents the
subset of companies with SBTs that have also disclosed data which
can be used to assess the contribution of RECs to their reported
(2015–2019) and potential future emission reductions. Importantly,
it was necessary that all companies in our sample reported their past
emissions using both market- and location-based emission account-
ing methods (Box 1). We also distinguish here between RECs and
power purchase agreements (PPAs), which represent a long-term
commitment by a company to purchase power from a particu-
lar renewable energy project. Although empirical evidence is still
needed, we have adopted here the common assumption that PPAs
do lead to additional renewable energy production and real emis-
sion reductions, as the long-term power price de-risks new proj-
ects and allows access to project finance14,15,17,18 (Box 1). By contrast,
we assume that RECs and similar market-based instruments are
non-additional, that is, not leading to additional renewable genera-
tion capacity or real emissions reductions, and we use the term RECs
to refer to all non-PPA instruments for that reason (see Methods
for details on these market-based instruments and terminology).
Although existing literature suggest that RECs are non-additional
due to their low and uncertain prices11–18, some claim that RECs may
still contribute to the generation of more renewable energy in the
longer term by, in aggregation, signaling to the market that there
is a demand for renewable energy9,23. Analyses so far do not find
evidence to support the existence of such an indirect market effect,
and we consequently do not consider this potential effect here. We
acknowledge, however, the possibility that such longer-term indi-
rect effects may become evident in future analyses.
Effect of RECs on reported historical emission reductions
The sample of companies reported a combined 30.7% reduction
in market-based scope 2 emissions between 2015 and 2019 (from
68.9 to 47.8 Mt CO2e per year, see solid black line in Fig. 1e). This
corresponds to a substantially higher reduction than the annual
4.2% of base year emissions required by SBTi’s linear 1.5 °C global
mitigation pathway (purple line). However, most of this reported
emission reduction is caused by the companies’ use of RECs (Fig.
1d), which increased from covering 8% of their purchased energy
in 2015 to 27% in 2019. Based on the existing empirical evidence,
we assume that this part of the reported reduction does not reflect
actual reductions of emissions from the energy grid. Without the
RECs contribution, market-based emissions would have reduced
by only 9.9% between 2015 and 2019, with the resulting emission
trajectory closely aligning with the required annual 2.5% base year
Renewable energy certificates threaten the
integrity of corporate science-based targets
Anders Bjørn   1,2,3 ✉, Shannon M. Lloyd   1,3, Matthew Brander   4 and H. Damon Matthews   2,3
Current greenhouse gas accounting standards allow companies to use renewable energy certificates (RECs) to report reduc-
tions in emissions from purchased electricity (scope 2) as progress towards meeting their science-based targets. However, pre-
vious analyses suggest that corporate REC purchases are unlikely to lead to additional renewable energy production. Here we
show that the widespread use of RECs by companies with science-based targets has led to an inflated estimate of the effective-
ness of mitigation efforts. When removing the emission reductions claimed through RECs, companies’ combined 2015–2019
scope 2 emission trajectories are no longer aligned with the 1.5 °C goal, and only barely with the well below 2 °C goal of the Paris
Agreement. If this trend continues, 42% of committed scope 2 emission reductions will not result in real-world mitigation. Our
findings suggest a need to revise accounting guidelines to require companies to report only real emission reductions as prog-
ress towards meeting their science-based targets.
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Box 1 | Corporate scope 2 emissions accounting and the role of RECs and PPAs
Under the Greenhouse Gas Protocol9, companies are required
to report their scope 2 emissions using both market- and
location-based accounting. Market-based accounting allows
companies to use market-based instruments, including RECs
and PPAs, which give companies the right to claim the use of re-
newable electricity and report the emissions from its production
(usually zero), rather than the emissions of the actual electricity
mix they consume9. At a given site and year, a company calcu-
lates market-based (MB) scope 2 (S2) emissions (E) by, first, mul-
tiplying the part of their electricity consumption covered by the
market-based instrument (CMBI) by the emission factor of the in-
strument (EFMBI) and, second, multiplying any uncovered electric-
ity consumption (C – CMBI) by a residual grid mix emission factor
(EFres), which represents the local grid without the electricity gen-
eration that has been claimed by RECs or PPAs:
EMB,S2 = CMBI × EFMBI + (C −CMBI) × EFres
Under location-based (LB) accounting, all companies on a grid
multiply their electricity consumption (C) by the average emission
factor (EFmix) for the grid mix, regardless of whether they have
purchased RECs or entered into PPAs:
ELB,S2 = C × EFmix
For companies with multiple sites and that consume other
energy products from a grid (heat, steam or cooling) in addition
to electricity, emissions (whether market- or location-based) are
calculated for each energy product and site, followed by aggregation.
We use a simple example to illustrate the calculation of market- and
location-based emissions for a company with one site that purchases
electricity from the local grid, which also provides electricity to other
consumers. The company uses no market-based instruments in Year
1, enters into a multiyear PPA in Year 2, and purchases RECs from an
existing renewable energy generator in Year 3.
In Year 1, the company has the same market- and location-based
emissions as it does not purchase any RECs or enter into any PPAs,
and because the grid average and residual emission factors are the
same (as no grid customers purchase RECs from or enter into
PPAs with the local windfarm).
In Year 2, a new windfarm becomes operational due to a
multiyear PPA that the company has entered into with the project
developer. The PPA achieves additionality as the project would
not have happened in the absence of the PPA, which allowed the
project developer to secure the necessary loans. Moreover, as total
electricity demand does not change, the coal power plant reduces
its production. The PPA gives the company the right to apply an
emission factor of zero to 100 MWh of its electricity consumption,
and the residual grid factor (which decreases slightly due to
the reduced generation from coal) is applied to its remaining
electricity consumption. The PPA allows the company to report
a substantial market-based emission reduction. The company’s
location-based emissions are also reduced due to the lower grid
average emission factor from the reduced generation from coal.
However, the reported emission reduction is less than with
the market-based approach, as the emission benefit of the new
windfarm is shared equally by all consumers on the grid under
location-based accounting.
In Year 3, the company, whose PPA is still active, purchases RECs
from the pre-existing windfarm. The RECs are non-additional
as they do not lead to the generation of additional renewable
energy, as the windfarm was operational in years 1 and 2 and
would have continued to operate in Year 3 in the absence of the
company’s RECs purchase. The RECs (covering 50 MWh) allow
the company to report a reduction in market-based emissions
compared with Year 2, even though total grid emissions did not
change (889 tCO2e). The reported reduction is therefore not real
and the RECs effectively increase the market-based emissions of
other energy consumers on the grid through an increase in the
residual emission factor. By contrast, the company’s location-based
emissions are the same as in Year 2 as the grid average emission
factor did not change.
0 tCO2e
889 tCO2e
EFmix: 0.89 tCO2e per MWh
EFres: 1.05 tCO2e per MWh
Company
100 MWh
200 MWh
Year 3
800 MWh
800 MWh
Other
consumers
0 tCO2e
100 MWh
PPA
100 MWh
EFMBI: 0
RECs
50 MWh
EFMBI: 0
0 tCO2e
889 tCO2e
EFmix: 0.89 tCO2e per MWh
EFres: 0.99 tCO2e per MWh
Company
100 MWh
200 MWh
Year 2
800 MWh
800 MWh
Other
consumers
0 tCO2e
100 MWh
PPA
100 MWh
EFMBI: 0
0 tCO2e
1,000 tCO2e
EFmix: 1.00 tCO2e per MWh
EFres: 1.00 tCO2e per MWh
Company
100 MWh
200 MWh
Year 1
900 MWh
800 MWh
Other
consumers
RECs (not real
reduction)
0
50
100
150
200
Emissions (tCO2e per year)
Location-based
PPA and
changes to EFres
Changes to EFmix
0
50
100
150
200
Emissions (tCO2e per year)
Market-based
Electricity grid
Electricity grid
Electricity grid
Year 1
Year 2
Year 3
Year 1
Year 2
Year 3
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emission reduction of SBTi’s linear well below 2 °C pathway (com-
pare the dashed black and turquoise lines in Fig. 1e). This real
emission reduction is driven by decarbonization of the residual
electricity grid (representing the grid mix without the energy
production that has been claimed by RECs or PPAs; see Box 1)
(Fig. 1b) and to a lesser extent by a net-increase in company use
of PPAs (Fig. 1c). By contrast, the increase in energy consumption
had a net-positive contribution to the change in emissions (Fig. 1a).
Hence, the appearance that the combined historical scope 2 emis-
sion trajectory of companies with SBTs easily aligned with the 1.5 °C
goal is strongly misleading and a consequence of heavy reliance on
RECs, which are not associated with real emission reductions.
Reported location-based emissions (black line in Fig. 1h)
reduced from 77.1 to 69.2 MtCO2e per year (10.3%) over the
period, far less than the reported market-based emissions. This is
as RECs and PPAs are not considered in location-based accounting
(Box 1), which is also why location-based emissions were higher
than market-based emissions in 2015. Instead, decarbonization of
the electricity grid was the main contributor to the reported emis-
sion reduction (Fig. 1g), with the increase in energy consumption
again having a net-positive contribution to the change in emissions
(Fig. 1f). The location-based emissions trajectory overall barely
complied with the well below 2 °C goal (turquoise line) and is simi-
lar to the market-based trajectory adjusted to exclude RECs (dotted
black line in Fig. 1e).
Companies headquartered in Europe and North America (88%
of the sample) reported larger combined market-based emission
reductions in 2015–2019 than companies based in Asia (11% of
the sample), but also relied more on RECs in their reporting. When
removing the contribution from RECs, North American compa-
nies’ combined market-based emission trajectory merely aligned
with the well below 2 °C goal, whereas European companies in
aggregate did not align with any Paris goal (see Supplementary
Fig. 7). At the industry level, only companies in ‘materials’, ‘hospi-
tality and biotech’, ‘health care and pharma’ (together accounting
for 21% of the sample companies) aligned with the 1.5 °C goal in
aggregate after adjusting the emission trajectories for RECs (see
Supplementary Fig. 8).
Renewable energy certificates also had a substantial influence on
the reported emission trajectories of individual companies; 89% of
sample companies purchased RECs in the 2015–2019 period and
the sample companies’ median market-based emission reduction
changed from 30.2% to 8.5% when removing the contribution from
RECs. Likewise, the share of companies aligned with the 1.5 °C goal,
0
2
4
6
–12
–8
–4
0
Energy consumption
Energy consumption
Grid mix
Residual grid mix
PPAs
RECs
–2
0
2
–15
–10
–5
0
2016
2017
2018
2019
45
50
55
60
65
70
2015
2016
2017
2018
2019
Market-based emissions (MtCO2e per year)
Reported emissions
Emissions adjusted for RECs
Well below 2 °C goal pathway
1.5 °C goal pathway
RECs
(unlikely to
be real
reductions)
Factors
other than
RECs
a
b
c
d
f
g
e
0
2
4
6
–12
–8
–4
0
2016
2017
2018
2019
Change in 2015 location-based emissions
(MtCO2e per year)
Change in 2015 market-based emissions (MtCO2e per year)
h
60
65
70
75
80
2015
2016
2017
2018
2019
Location-based emissions
(MtCO2e per year)
Factors
other than
RECs
Fig. 1 | Combined scope 2 emissions of sample companies and the factors contributing to their reductions since 2015. a–e, Market-based accounting.
f–h, Location-based accounting. a–h, The contributions of energy consumption (a,f), residual grid mix (b), grid mix (g), PPAs (c) and RECs (d) to the reported
market- (e) and location-based (h) emission trajectories, with the contribution of RECs to reported market-based emission reductions highlighted in orange.
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aligned with the well below 2 °C goal, and not aligned with either
goal changes from 68%, 8% and 24% to 36%, 12% and 52%, respec-
tively, when excluding RECs (Fig. 2); 40% of the companies whose
reported market-based emissions aligned with the 1.5 °C goal did not
align with any Paris goal after adjusting for RECs (see the grey flows
between first and second column of Fig. 2). Hence, market-based
emission disclosures give the impression that three-quarters of the
companies were in alignment with one of the Paris goals. However,
when removing contributions from RECs, only half of companies
still demonstrated such alignment and, of these, alignment with
the less ambitious goal became more common. Much of the differ-
ence in the distribution of company alignment with the Paris goals
between the market- and location-based accounting disappears after
removing the contribution of RECs (Fig. 2). However, for one-third
of the companies the temperature goal alignments is different for
adjusted market- and location-based accounting. For example, for
companies that increased their use of PPAs over the period adjusted
market-based emissions commonly aligned with a more ambitious
temperature goal than location-based emissions.
Scenario of future REC usage in pursuit of SBTs
We now turn from the sample companies’ past reported emissions
to their future commitments to reducing emissions through SBTs
(Fig. 3a). Few companies (6%) report scope 2 SBTs independent
from other emission scopes. Most companies (82%) report scope 2
SBTs in combination with SBTs for scope 1 (covering direct emis-
sions24) and the rest (12%) in combination with scope 1 and scope 3
SBTs (covering value chain emissions beyond scope 2; ref. 24). Most
companies (89%) state that their SBT refers to market-based
accounting, whereas the SBTs of the remaining 11% refer to
location-based accounting (in short, market- and location-based
SBTs). This indicates that most companies aim to use RECs and
PPAs in pursuing their targets.
Companies with market-based SBTs tend to commit to more
ambitious emission reductions (compare the orange and blue boxes
in Fig. 3a). The trend is especially pronounced for SBTs covering
scopes 1 and 2, where the median annual reduction is 1.7 percent-
age points higher for market- over location-based SBTs (4.2% versus
2.5% of base year emissions). This may be because market-based
accounting offers a relatively low-cost means of appearing to reduce
emissions14, and therefore companies using this approach are will-
ing to set more ambitious reduction targets; 58% of market-based
SBTs align with the 1.5 °C goal (below purple line in Fig. 3a) and
28% with the well below 2 °C goal (between the turquoise and
purple line). The corresponding shares for location-based SBTs
are 8% and 54%, respectively. Some SBTs do not align with either
temperature goal as SBTi, until 2019, approved targets aligning
with a less ambitious 2 °C goal8 and one target-setting method
(the sectoral decarbonization approach4,25) allows companies with
certain characteristics to reduce emissions at a lower rate than is
required globally.
We next estimated the SBTs specifically for scope 2 (Fig. 3b) from
SBTs that cover scopes 1 and 2, or scopes 1, 2 and 3, assuming future
scope 2 emission reduction will have the same relative contribution
to total emission reductions as in the past (see Methods). These esti-
mates illustrate the implications of a continuation of current trends,
rather than an explicit prediction of future emissions pathways. The
estimated market-based scope 2 SBTs are generally more ambitious
than the reported market-based SBTs for overarching emissions
scopes and are closer to the reported SBTs specifically for scope 2
(Fig. 3a). Note, however, that 3% of these estimated market-based
SBTs involve emission increases (above the 0% line in Fig. 3), as
the companies in question increased scope 2 emissions during the
past reference period; 75% of the estimated market-based scope
2 SBTs comply with the 1.5 °C goal and 12% comply with the
well below 2 °C goal. Across companies, the estimated combined
market-based scope 2 SBTs involve an annual reduction of 7.2% of
base year emissions (weighted average by base year emissions; see
Fig. 3b) and would thereby seem to easily comply with the 1.5 °C
goal (purple line). By contrast, the estimated location-based scope
2 SBTs only barely comply with the well below 2 °C goal collectively
(the weighted average reduction rate is 2.7% of base year emissions).
However, the potential use of RECs may overstate the apparent Paris
goal alignment of the market-based SBTs.
To investigate further, we estimated and removed the future con-
tribution of RECs from the estimated market-based scope 2 SBTs
(Fig. 3c) on the basis of the relative contributions of RECs to past
scope 2 emissions reductions (see Methods). This exploratory sce-
nario results in a combined real reduction rate of 3.6% of base year
emissions across companies (see the weighted average in Fig. 3c),
which is markedly lower than the 7.2% reduction rate for unad-
justed market-based scope 2 SBTs (Fig. 3b) and merely complies
with the well below 2 °C goal. Moreover, although nearly all (77 of
102) companies pursuing market-based scope 2 SBTs seem to align
with the 1.5 °C goal (Fig. 3b), far fewer (38 of 102) companies will
in fact align with the 1.5 °C goal if they continue their past pattern
of REC usage (Fig. 3c). In that scenario, companies will most com-
monly not align with either temperature goal (45 of 102), whereas
a minority (19 of 102) will align with the less ambitious well below
2 °C goal. The 25–75th percentile range of estimated market-based
emission reduction rates adjusted for RECs (Fig. 3c) is similar to the
corresponding range for estimated location-based SBTs (Fig. 3b),
which challenges the notion that market-based SBTs tend to
be more ambitious than location-based SBTs (Fig. 3a,b). Taken
together, the implication of this future emission scenario is that
Aligned with 1.5 °C goal
Aligned with well below 2 °C goal
Not aligned with either goal
35%
13%
52%
Share of companies
51%
9%
40%
68%
8%
24%
36%
12%
52%
Reported
market-based
Market-based
adjusted for RECs
Location-based
Fig. 2 | Share of sample companies whose 2015–2019 scope 2 emission
trajectories aligned with temperature goals for three emission accounting
approaches. The grey flows between the first and second column indicate
the shares of companies for which the temperature goal alignment changed
when removing RECs from their market-based emission trajectories. See
the Supplementary Spreadsheet for individual company results.
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an estimated 42% of the committed cumulative scope 2 emission
reductions (101 MtCO2e) from base year to target year will come
from REC purchases and hence may not reflect actual reductions of
global emissions (Fig. 4).
At the regional level, European and North American companies
generally targeted higher future emission reductions than Asian
companies. However, these regional differences substantially reduce
after adjusting the targets for estimated future RECs purchases (see
Supplementary Fig. 9). Companies in half of the ten industries
(together accounting for 45% of the sample companies) collec-
tively align with the 1.5 °C goal after adjusting the SBTs for RECs,
whereas companies in two industries align with the well below 2 °C
goal and companies in three industries do not align with either (see
Supplementary Fig. 10).
Implications and outlook
In this study we assessed the use of RECs by companies with SBTs
and the implications for their Paris alignment claims. The wide-
spread use of RECs raises doubt on companies’ apparent historic
Paris-aligned emission reductions, as it allows companies to report
emission reductions that are not real. Moreover, a continuation of
recent trends would mean that nearly half of future scope 2 emis-
sion reductions reported by companies with SBTs would not be real.
Overall, our results confirm earlier suppositions19,20 and suggest that
corporate use of RECs in the pursuit of SBTs is the norm rather than
the exception. This is consistent with recent findings for a smaller
sample of companies with net-zero targets18. SBTs must cover both
scope 1 and scope 2 emissions6, and for many industries scope 2
emissions are the larger of the two (see Supplementary Figs. 11–13
for a contribution analysis of our company sample). Consequently,
companies’ use of RECs threatens to undermine the integrity of
SBTs as a whole. Together with recent findings of widespread
accounting and reporting issues for scope 3 emissions26,27, our find-
ings should inform future work scrutinizing SBTs and companies’
progress against them5,8,28.
Although our sample only covers 115 (14%) of the 813 compa-
nies with SBTs at the time (due to data availability and the exclu-
sion of energy generators, utilities and companies with intensity
targets), it is fairly representative in terms of regions and industries
(see Supplementary Figs. 5 and 6). We encountered several difficul-
ties in interpreting companies’ disclosure of RECs and PPAs and our
main results (Figs. 1–4) are based on conservative interpretations
(see Supplementary Section 1 for details). A set of parallel results
(Supplementary Figs. 1–4) show that reported emission reductions
could be even more inflated by RECs than is the case for our main
results. Our evaluation of the Paris alignment of corporate scope 2
emission trajectories is based on the same global mitigation path-
ways used in SBTi’s target progress assessment8 (4.2% and 2.5% base
year emission reductions annually for the 1.5 °C and well below
2 °C goals, respectively). However, Paris-aligned mitigation sce-
narios commonly involve substantially higher reductions in direct
emissions for the power sector than for the rest of the economy
(for example, 7.2% and 3.7% reduction of 2020 emissions annually
between 2020 and 2030 for the 1.5 °C and well below 2 °C goals,
respectively, in the mitigation scenario underlying SBTi’s sectoral
decarbonization approach25,29). This would translate to a require-
ment for companies to reduce scope 2 emissions at a higher rate
than the global mitigation pathways, meaning that fewer companies
would be Paris-aligned than suggested by our study.
Our findings have implications for SBTi’s current approach of
allowing companies to choose between market- and location-based
accounting when setting SBTs and reporting target progress6. In
addition to the problem that market-based accounting allows
reporting emission reductions that are not real, there is a risk of
double counting the emission benefits of renewable energy gen-
eration if one company claims the use of specific renewable energy
generation using market-based accounting, whereas other compa-
nies count that same renewable energy using the grid average emis-
sion factor in their location-based accounting. There are at least two
alternatives that would make it more likely that all reported scope
2 emission reductions are real and renewable energy generation is
only counted once (see Table 1). First, SBTi could require all com-
panies to use only location-based accounting. A potential drawback
with this option is that it would disincentivize companies from using
PPAs or other market-based instruments that can lead to addi-
tional renewable energy generation. In the second alternative, all
Reported
Estimated
Adjusted for RECs
Box components:
Median
Weighted average
25–75th percentile range
Non-outlier range
Accounting approach:
Market-based
Location-based
Adjusted market-based
Paris goal:
1.5 °C
Well below 2 °C
Scope 2
Scope 2
N = 7
N = 86
N = 8
N = 9
N = 5
N = 102
N = 13
N = 102
Scope 2
Scopes 1 and 2
Scopes 1, 2 and 3
10
a
c
b
5
0
–5
Annual percent emission change (% of base year)
–10
–15
Fig. 3 | Annual future emission reductions based on the SBTs of the sample companies. All SBTs have been annualized by dividing their targeted
percentage emission reduction by the time span (target year minus base year). a, SBTs as reported by companies, covering different emissions scopes
and emission accounting approaches. b, scope 2 SBTs estimated on the basis of companies’ reported SBTs (from a) and past scope 2 to total emission
reductions. c, Market-based scope 2 SBTs (from b) adjusted by removing the estimated contribution from RECs based on past REC-related to total scope
2 emission reductions. The number of targets covered is indicated above each box. The non-outlier ranges (whiskers) are defined as 1.5-times the 25–75th
percentile range. Outliers are not displayed. See the Supplementary Spreadsheet for individual company estimates.
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companies could be required to use a restrictive version of market-
based accounting, involving mandatory demonstration of the
additionality of market-based instruments (whether PPAs or RECs),
that is, evidence that the renewable energy generation would likely
not have occurred without the instrument30,31. The Net Zero Carbon
Buildings Framework of the UK Green Buildings Council includes
such a requirement22,32. However, experience from carbon-offsetting
markets shows that demonstration of additionality is complicated
and often contested33 and more research and method develop-
ment may therefore be needed for this option to be viable. Some
Market-based emission
reductions: 234 MtCO2e
Market-based
emission
reductions from
RECs (unlikely to
be real):
101 MtCO2e
Market-based
emission reductions
from factors other
than RECs:
133 MtCO2e
Location-based emission
reductions from factors other
than RECs:
4 MtCO2e
Fig. 4 | Estimated cumulative scope 2 emission reduction from base to target year on the basis of the sample companies’ SBTs and the estimated role
of RECs in achieving these reductions. The inner circle represents the estimated emission reduction commitments by companies whose SBTs refer to
market- and location-based accounting. The outer ring represents the estimated contributions of RECs and other factors (see Fig. 1) to these reduction
commitments. The median base year and target year of the SBTs are 2017 and 2030, respectively.
Table 1 | The current emission accounting requirement of SBTi and two (not exhaustive) alternatives that could potentially prevent
double counting and the reporting of emission reductions that are not real
Accounting requirements
Issues with reporting
emission reductions
that are not real?
Issues with double counting?
Other potential issues (not exhaustive)
Companies choose between
location- and market-based
accounting with no mandatory
demonstration of additionality
(current requirement of SBTi)
Yes: companies may use
non-additional RECs.
Yes: a unit of generated
renewable energy can count
towards the market-based
emission reduction of
one company and the
location-based emission
reductions of other companies.
Resources may be diverted from interventions linked to
actual emission reductions (such as energy efficiency
improvements) to purchasing RECs.
All companies use
location-based accounting
No.
No.
May disincentivize companies from contributing to
new renewable energy generation, and the associated
emission reductions, through PPAs and other
market-based instruments.
All companies use market-based
accounting with mandatory
demonstration of additionality
No.
No.
Demonstration of additionality is complicated and
uncertain.
Use of market-based instruments for claiming renewable
energy supply may be seen as misleading, since they
do not reflect the dependence of the user on the wider
electricity generation and transmission system.
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stakeholders might also reject the use of market-based instruments
altogether, whether additional or not, as this way of claiming to
be supplied by renewable energy does not reflect how renewable
energy supply relies on a broader system of grid-balancing, back-up
capacity and transmission services, which are often supported by
tax payers or other energy consumers10.
Our study highlights issues with the use of RECs in the context
of SBTs. However, the Greenhouse Gas Protocol scope 2 guidance
argues that the use of non-additional market-based instruments is
not a problem as the main goal is to allocate total grid emissions
to individual consumers9. From that perspective, individual com-
panies can legitimately use RECs to report emissions reductions
that do not reflect a global emission reduction, as the market-based
emissions of all energy users on the grid sum to total grid emissions.
Based on our analysis, we encourage the Greenhouse Gas Protocol
to reconsider its stance on additionality for two reasons. First, as
many corporate energy users do not report emissions (nor do resi-
dential households), a company’s purchase of non-additional RECs
effectively increases the market-based emissions of other actors
that do not report emissions (through an increase in the residual
emission factor; see Box 1). This means that total reported
market-based emissions will always overstate the actual grid-total
emissions reduction due to incomplete reporting. Second, as
companies increasingly disclose emissions in the context of tar-
gets informed by the need to reduce global emissions (SBTs5 and
net-zero targets34,35), it is clearly misleading to stakeholders if
companies can meet these targets without reducing global emis-
sions. This would also be the case in a situation with complete
reporting. We acknowledge that this second issue raises a related
and broader limitation with the use of standard corporate emis-
sions accounting (whether market- or location-based), in that
changes in emissions outside of the scopes 1, 2 and 3 accounting
boundary are not shown. Apparent reductions within the bound-
ary may therefore not reflect total reductions in global emis-
sions. For example, a company’s decision to use bioenergy may
cause emissions outside its value chain through indirect land use
change36. Accordingly, SBTi should consider options for comple-
menting standard scopes 1, 2 and 3 accounts with consequential
emission accounting methods36 to ensure that actions taken to
achieve STBs do not unintentionally increase emissions outside the
accounting boundary.
Conclusion
Our study shows that the common voluntary corporate prac-
tice of using RECs that are unlikely to drive additional renewable
energy production casts serious doubt on the veracity of reported
corporate emission trajectories and their apparent alignment
with the most ambitious Paris Agreement temperature goal. More
broadly, there is a need to critically consider the extent to which
voluntary corporate actions can be relied on for achieving a Paris-
aligned transition5.
Online content
Any methods, additional references, Nature Research report-
ing summaries, source data, extended data, supplementary infor-
mation, acknowledgements, peer review information; details of
author contributions and competing interests; and statements of
data and code availability are available at https://doi.org/10.1038/
s41558-022-01379-5.
Received: 28 November 2021; Accepted: 29 April 2022;
Published online: 9 June 2022
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Methods
Terminology for market-based instruments and their potential effects on
renewable energy generation. There is no formally agreed terminology for the
market-based instruments that companies can use to obtain renewable energy
attributes (that is, rights to claim usage of renewable energy) under the market-based
accounting approach. A large number of instruments with similar characteristics
exist and the same instrument may go by different names in different regions9.
For example, the Bloomberg database37 defines RECs broadly as the “…amount
of bundled and unbundled energy attributes purchased in the form of tradable
certificates from an official registry, in thousands of megawatt hours. This field
includes voluntary certificates such as Guarantees of Origin sold within the
Renewable Energy Certificate System and European Energy Certificate System as
well as Renewable Energy Certificates commonly used in the United States”. SBTi
identifies RECs and PPAs as the two available market-based instruments for meeting
renewable electricity targets within its net-zero standard38, although other contractual
arrangements exist, such as supplier-specific emission factors, and green power
products or tariffs. It should also be noted that PPAs themselves generally include the
renewable energy attributes associated with the power that is purchased (though it is
also possible to structure a PPA for the power only, without the associated attributes).
For simplicity in the terminology used we use the term REC for all contractual
arrangements for renewable energy attributes other than PPAs and we use the term
PPA for PPAs that include renewable energy attributes, unless otherwise stated.
We use the term additionality in relation to the effect of RECs and other
market-based instruments on the generation of renewable energy. The
additionality term originated in the carbon-offsetting literature31,33. In the context
of using market-based instruments for renewable energy to report emission
reductions, we here follow the definition of the term from the ISO 14064-2
standard39: “Additionality, as a concept, describes the relationship between cause
and effect. For any cause and effect, the effect can be described as being additional
if it would not have occurred in the absence of the cause”. In this study, the effect
can both refer to the generation of renewable energy and the development of new
capacity (for example, windmill or solar panels) for renewable energy generation.
Company data. Our initial sample was composed of the 813 companies with
approved SBTs as per the online SBTi database7 on July 20th, 2021. The SBTs in
the SBTi database generally contain the following data of relevance to this study:
sector, emission metric (absolute or intensity-based), emission scope (1, 2, 3 or
a combination), base year, target year and targeted percentage reduction in the
emission metric. We first excluded 28 energy generators and utilities (3% of the
initial sample) due to our focus on companies that purchase energy. We excluded
another 101 companies (12% of the initial sample) that only have intensity-based
SBTs covering scope 2 to avoid the additional uncertainty associated with
converting intensity targets to absolute emission targets. For companies with
multiple SBTs covering different emissions scopes and target years, we selected a
single SBT, prioritizing targets specifically for scope 2, when available (otherwise,
we prioritized targets for scopes 1 and 2 combined over targets for scopes 1, 2 and
3 combined), followed by prioritization of the shortest target time span (that is,
the difference between the base year and target year). In addition to the target data
sourced from SBTi, we collected information on the scope 2 accounting approach
that each SBT refers to (market- or location-based) from company disclosures to
CDP (formerly the Carbon Disclosure Project)40 (this information is not provided
by SBTi; see Supplementary Section 2.4 for more details). Note, however, that only
around half of companies with approved SBTs reported to CDP. We were therefore
left with 338 of the 813 companies after removing energy generators and utilities
(28), intensity targets (101) and companies that did not report to CDP (346).
For these 338 remaining companies, we analyzed their past emissions for
2015–2019. The start year (2015) aligns with the publication of the Greenhouse
Gas Protocol standard related to market-based accounting (see Box 1)9, the
introduction of a distinction between market- and location-based scope 2
emissions in the CDP questionnaire40 and the approval of the first SBTs by SBTi7.
We ended the period in 2019 to avoid abnormalities caused by COVID-19 and
as 2019 is the most recent year for which complete data was available for many
companies. We used companies’ 2015–2019 emissions disclosed to CDP and, in
cases of missing or apparently erroneous data, complemented with emission
data from the Bloomberg database37. We also used CDP data on companies’
purchased energy (electricity, heat, steam and cooling) and purchased RECs
and PPAs (details in Supplementary Section 1). We adjusted ambiguous or
apparently erroneous datapoints (details in Supplementary Section 2). We excluded
223 companies (27% of the initial sample and 66% of the restricted sample
of 338 companies) due to missing or poor-quality data, leaving 115 companies
(14% of the initial sample) that are included in our analysis (details in
Supplementary Section 2).
The resulting sample of 115 SBTs have been approved by SBTi between 2016
and 2021. We used SBTi’s classification of headquarter regions and industries7 to
assess the representativeness of the final company sample (Supplementary
Section 4) and estimate combined results at the region level (Supplementary
Figs. 7 and 9). For combined results at the industry level (Supplementary Figs. 8
and 10) and the industry-level assessment of scope 2 emissions relative to other
emission scopes (Supplementary Figs. 11–13), we used the industry classifications
of CDP40 as it involves a more manageable number of industries (10 versus the 49
of SBTi’s classification system7).
Reference mitigation pathways for the Paris temperature goal. We used
SBTi’s linear 1.5 °C and well below 2 °C global mitigation pathways41, involving
annual reductions of 4.2% and 2.5% of base year emissions, respectively. The
SBTi developed these pathways from a subset of the pathways described in the
Special Report on Global Warming of 1.5 °C of the Intergovernmental Panel on
Climate Change42. SBTi determined this subset by applying criteria related to
temperature limit probability, temporary overshoot of emission budget, year of
peak emissions and near-term emission reduction rate, with the aim of isolating
pathways conforming with principles of plausibility, responsibility, objectivity,
and consistency41. The SBTi notes that linearization of emission pathways over
long timespans can result in substantial deviations of the pathways’ cumulative
emissions and therefore recommends the use of the derived reduction rates (4.2%
and 2.5%) for the shorter time span of 2020–2035. However, the SBTi also advises
companies to apply these reductions rates to set SBTs for base years before 20206,
and SBTi applied the requirement of the 1.5 °C pathway (4.2% reduction in base
year emissions per year) as a benchmark for the combined emission trajectory of
companies with SBTs in the 2015–2019 period in its latest target progress report8.
Following SBTi, we here apply the annual emission reduction rates of the two
SBTi pathways (4.2% and 2.5%, respectively) as references to evaluate the Paris
alignment of past corporate emission trajectories (2015–2019) and future targeted
trajectories (median values 2017–2030) for the 115 companies.
Estimating the contribution of scope 2 to total emission changes for 2015–2019.
Based on the equation for calculating market-based scope 2 emissions (Box 1),
we used the following set of equations to calculate the contribution of changes
in energy consumption, use of PPAs, use of RECs (collectively referred to as
market-based instruments or MBI) and residual grid mix emission factor to
reported changes in market-based scope 2 emissions for each year (that is, 2016,
2017, 2018 and 2019, noted with ‘t’ below) relative to 2015 (Figs. 1 and 2).
Contribution to reported emission changes (ΔE) from change in energy
consumption (C) relative to 2015 (in tCO2e per year):
ΔEMB,S2,ΔC,t = EMB,S2,2015 ×
C2015 −Ct
C2015 −CMBI, 2015
(1)
Contribution to reported emission changes from change in energy
consumption that is covered by PPAs (CPPA) relative to 2015 (in tCO2e per year):
ΔEMB,S2,ΔPPA,t = EMB,S2,2015 × CPPA, t −CPPA, 2015
C2015 −CMBI, 2015
(2)
Contribution to reported emission changes from change in energy
consumption that is covered by RECs (CREC) relative to 2015 (in tCO2e per year):
ΔEMB,S2,ΔREC,t = EMB,S2,2015 × CREC, t −CREC, 2015
C2015 −CMBI, 2015
(3)
Contribution to reported emission changes from change in the residual grid
mix emission factor (EFres) relative to 2015 (in tCO2e per year):
ΔEMB,S2,ΔEF_res,t
= (EMB,S2,2015 −EMB,S2,t) −(ΔEMB,S2,ΔC,t + ΔEMB,S2,ΔPPA,t + ΔEMB,S2,ΔREC)
(4)
Note that equation (4) estimates the contribution from a change in the residual
grid mix emission factors as the difference between the change in reported emissions
(the first parenthesis) and the sum of the contributions to emission changes
from changes in energy consumption, PPAs and RECs (the second parenthesis)
as companies do not directly disclose the values of EFres behind their reported
emissions to CDP. Note also that equations (1–4) are based on the approximation
that EFMBI is zero for all RECs and PPAs, which allows treating RECs and PPAs as if
they virtually eliminate the energy consumption they cover in equation (1–3). This
approximation is needed as companies only reported EFMBI values to CDP for part
of the study’s time period (2016, 2017 and 2018). We consider the approximation
that EFMBI is zero in all cases sound, as biomass and biogas incineration is the only
type of renewable energy generation known to emit (small amounts of) GHGs
during operation (in addition to emission of biogenic CO2, which is considered
climate neutral in corporate accounting24), and because this energy source accounted
for a negligible share of the combined energy consumption claimed by RECs or
PPAs (CMBI) across the company sample (less than 1% in 2019). We note that some
companies reported non-zero values of EFMBI for other types of renewable energy
generation such as hydropower, wind and solar, and we assume that this reflects
a misunderstanding of the CDP questionnaire (for example, reporting life-cycle
emission factors instead of operational emission factors).
We next calculated adjusted market-based scope 2 emissions for each year
following 2015 (t) (aEMB,S2, in tCO2e per year) by removing the contribution from
RECs to reported emission changes (see equation (3)):
aEMB,S2, t = EMB,S2,t + ΔEMB,S2,ΔREC,t
(5)
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For location-based accounting, we used a similar set of equations, based on the
equation for calculating location-based scope 2 emissions (Box 1), to calculate
the contribution of changes in energy consumption and the average grid mix
emission factor to reported changes in scope 2 emissions between 2015 and each
following year (t):
Contribution to reported emission changes from change in energy
consumption (C) relative to 2015 (in tCO2e per year):
ΔELB,S2,ΔC,t = ELB,S2,2015 × C2015 −Ct
C2015
(6)
Contribution to reported emission changes from change in the average grid
mix emission factor (EFmix) relative to 2015 (in ton CO2e per year):
ELB,S2,ΔEF_mix,t = (ELB,S2,2015 −ELB,S2,t) −ΔELB,S2,ΔC,t
(7)
Annualization of SBTs. As shown in Fig. 3a, to allow for comparison of
the targeted emission reductions across SBTs with varying timespans, we
annualized the reported SBTs, formulated as a percentage reduction between the
company-specific base year (B) and target year (Y), following Wang et al43:
SBT′ =
SBT
Y −B
(8)
The resulting annualized SBT (SBT′) indicates an annual percent reduction of
base year emissions and assumes a linear emission trajectory between base year
and target year.
Estimation of SBTs specific for scope 2. As shown in Fig. 3b, most companies
in our sample (94%) do not have SBTs specifically for scope 2. Instead they have
targets that combine scope 1 and 2 (82%), or scope 1, 2 and 3 emissions (12%).
To derive SBTs specifically for scope 2 in these cases, we first calculated the past
contribution of scope 2 emission changes (S2Cpast, dimensionless) to the emission
reductions for the emission scopes covered by a company’s reported SBT:
S2Cpast = ES2,b −ES2,y
ESR,b −ESR,y
(9)
Here, ES2 is the reported historic scope 2 emissions and ESR is the reported
historic emissions for the scopes covered by the company’s reported SBT, both
referring to market-based accounting for companies with market-based SBTs and
location-based accounting for companies with location-based SBTs; b and y are
company-specific start- and end-years within the 2015–2019 period, selected to
represent the longest consecutive decrease in ESR. This approach (as opposed to a
common start- and end-year) avoids past increases in ESR, which is desirable given
that S2Cpast forms the basis for projecting a company’s future scope 2 emissions
in the context of a targeted emission decrease across the emission scopes covered
by its reported SBT. On average across our sample, the b to y period spans
2.5 years. For one of the sample companies, ESR increased consistently in the
2015–2019 period, meaning there was no company-specific basis for projecting
scope 2 emissions. For that company we instead assigned S2Cpast the average value
calculated for the other sample companies with reported SBTs covering the same
emission scopes (1–3, market-based), which was 13.4%.
Next we extrapolated from the past reference period (b to y) by assuming that
S2Cpast applies to the full period between the specified base year, B, and future
target year, Y, of the reported company SBT and calculated the corresponding
targeted annual reductions in scope 2 emissions for that period (ΔE′
S2) (again,
market- or location-based, depending on the reported SBT):
ΔE′
S2 = ESR,B × ΔSBT′ × ΔS2Cpast
(10)
Finally, we estimated the annualized SBT specifically for scope 2:
SBT′
S2 = ΔE′
S2
ES2,B
(11)
Adjustment of scope 2 SBTs for RECs. Given that many companies in our sample
used RECs to report market-based emission reductions in the 2015–2019 period,
it is likely that they will continue to use RECs as a contribution to meeting their
scope 2-specific SBTs. To take this into account, we modified equation (9) to
remove the contribution of RECs (Fig. 3c) to past changes in scope 2 emissions,
by drawing on equations (3) and (5), which were modified to cover the b to y
reference period (same as for equation (9)) instead of the 2015 to t period:
aS2Cpast =
EMB,S2,b−aEMB,S2,y
EMB,SR,b−EMB,SR,y
=
ES2,mark,b−(EMB,S2,y+ΔEMB,S2,ΔREC,y)
EMB,SR,b−EMB,SR,y
=
ES2,mark,b−
(
EMB,S2,y+EMB,S2,2015×
CREC, y−CREC, b
Cb−CMBI, b
)
EMB,SR,b−EMB,SR,y
(12)
aS2Cpast can be interpreted as the contribution of a real change in scope 2 emissions
(that is, without the contribution of RECs) to a reported change in emissions for
the scopes covered by the reported SBT. Following this, we calculated the adjusted
scope 2-specific annualized SBTs (aSBT′
S2) by using equations (10) and (11) with
aS2Cpast as input instead of S2Cpast. For the sample company with a consistent
increase in ESR in the 2015–2019 period, we (similarly to above) assigned aS2Cpast
the average value calculated for the other sample companies that have SBTs that
cover the same emission scopes (1–3, market-based), which was 11.9%.
Contribution of RECs to committed cumulative scope 2 emission reductions.
Based on the above estimations of SBT′
S2 for market- and location-based targets,
and aSBT′
S2 for market-based targets, we estimated the contribution of RECs to the
cumulative emission reductions from the base year, B, to the target year, Y, for each
SBT, again assuming a linear pathway (Fig. 4). First, we calculated the reductions
in scope 2 emissions (market- or location-based, depending on the reported SBT)
between Y and B:
ΔES2 = ES2,B × SBT′
S2 × (Y −B)
(13)
For 33 companies, equation (13) resulted in a ΔES2 larger than ES2,B, which
would imply negative scope 2 emissions in Y. This is unlikely to occur (the median
Y is 2030) and we therefore assumed that these companies will stop reducing scope
2 emissions when they reach a value of zero. We therefore corrected the value of
ΔES2 to ES2,B in these cases and corrected Y to the time of zero scope 2 emissions:
Y = B +
1
SBT′
S2
(14)
For each SBT, we then calculated the cumulative reduction of scope 2 emissions
between B and Y:
cumΔES2 = ΔES2 × (Y −B) × 1
2
(15)
For market-based SBTs, we further calculated the annual scope 2 emission
reduction between B and Y adjusted to remove the REC contribution (aΔES2)
by using aSBT′
S2 instead of SBT′
S2 as input in equation (13). In cases where ΔES2
is larger than ES2,B, we downscaled aΔES2 on the basis of the correction of ΔES2
(described above):
aΔES2 = ES2,B × aSBT′
S2
SBT′
S2
(16)
We then calculated the adjusted cumulative emission reductions with the
contribution of RECs removed (a.cumΔES2) by using aΔES2 instead of ΔES2 as
input in equation (15). We then estimated the cumulative contribution from
RECs to emission reductions (REC.cumΔES2) as the difference between cumΔES2
and a.cumΔES2. Finally, we aggregated REC.cumΔES2 for all market-based SBTs
and compared it with the aggregated cumΔES2 for all market-based SBTs and the
aggregated cumΔES2 for all location-based SBTs.
Note that five of the sample companies reduced their purchases of RECs
between b and y (the start- and end-years in equation (9)) to such an extent that a
continuation would lead to a projected negative use of RECs in Y or earlier, which
would not be possible. For the estimation of REC.cumΔES2 of these five companies,
we therefore corrected aSBT′
S2, assuming that the use of RECs would decrease
linearly from B until reaching a value of zero in Y:
corrected.aSBT′
S2 = SBT′
S2 + (aSBT′
S2 −SBT′
S2) ×
CREC,B
(CREC, b −CREC, y) × Y−B
y−b
(17)
Note that the SBT of one of the five companies has 2011 as B, which is before
the Greenhouse Gas Protocol began permitting the use of RECs through the
market-based accounting approach9. To account for the reported use of RECs
between b and y, we used b instead of B in equation (17) for this company. The
corrections of aSBT′
S2 for these five companies had a modest influence on results,
causing the aggregated REC.cumΔES2 (illustrated in Fig. 4) to change from
97 MtCO2e to 101 MtCO2e.
Data availability
This study is based on preexisting datasets, primarily references7,37,40. The data
behind all figures are available in the Supplementary Spreadsheet.
Code availability
No custom code was developed for this study. All equations are given in Methods
and we used Microsoft Excel for the analysis.
References
	37.	Bloomberg Database (Bloomberg, 2021); https://www.bloomberg.com/
professional/solution/bloomberg-terminal/
Nature Climate Change | www.nature.com/natureclimatechange

Articles
Nature Climate Change
	38.	SBTi Corporate Net-Zero Standard v.1.0 (SBTi, 2021); https://
sciencebasedtargets.org/resources/files/Net-Zero-Standard.pdf
	39.	ISO 14064-2:2019. Greenhouse Gases—Part 2: Specification with Guidance at
the Project Level for Quantification, Monitoring and Reporting of Greenhouse
Gas Emission Reductions or Removal Enhancements (International
Organization for Standardization, 2019); https://www.iso.org/standard/
66454.html
	40.	CDP 2010–2020 Annual Questionnaire—Investor and Supply Chain Version.
Additional Online Lookups in 2021 Annual Questionnaire (CDP, 2021);
https://www.cdp.net/en#a8888e63070314c2285625253a462815
	41.	Foundations of Science-based Target Setting v.1.0 (SBTi, 2019); https://
sciencebasedtargets.org/resources/files/foundations-of-SBT-setting.pdf
	42.	Huppmann, D. et al. Scenario Analysis Notebooks for the IPCC Special Report
on Global Warming of 1.5 °C (International Institute for Applied Systems
Analysis, 2018); https://doi.org/10.22022/SR15/08-2018.15428
	43.	Wang, D. D. & Sueyoshi, T. Climate change mitigation targets set by global
firms: overview and implications for renewable energy. Renew. Sustain. Energy
Rev. 94, 386–398 (2018).
Acknowledgements
We are very thankful for the valuable feedback of the three anonymous reviewers. This
research was funded by the Natural Sciences and Engineering Research Council of
Canada (NSERC) Discovery Grants Program (grant no. RGPIN/6956-2017 to S.L. and
RGPIN-2017-04159 to H.D.M.), Concordia University Research Chair funding (H.D.M.)
and the Concordia University Horizon Fellows Program (A.B.).
Author contributions
A.B. conceived the study idea. A.B. developed the study design with contributions
from M.B., S.L. and H.D.M. M.B. synthesized the literature on market-based scope 2
emission accounting. A.B. performed the data analysis and produced the figures with
contributions from S.L. H.D.M. assisted with framing the manuscript. A.B. drafted the
manuscript with contributions from H.D.M., S.L. and M.B. All authors contributed to
manuscript editing and revisions.
Competing interests
The authors declare no competing interests.
Additional information
Supplementary information The online version contains supplementary material
available at https://doi.org/10.1038/s41558-022-01379-5.
Correspondence and requests for materials should be addressed to Anders Bjørn.
Peer review information Nature Climate Change thanks Jing Meng and the other,
anonymous, reviewer(s) for their contribution to the peer review of this work.
Reprints and permissions information is available at www.nature.com/reprints.
Nature Climate Change | www.nature.com/natureclimatechange

    Scientific Research Study Methods:

Answer: Among the 813 companies with approved science-based targets at the time, we identified 115 companies with complete disclosure data for the period from 2015 to 2019. The data included reported emissions, as well as the variables that companies used to calculate these reported emissions following the Greenhouse Gas Protocol. These variables include energy consumption, direct support for new renewable energy production (power purchase agreements) and purchased renewable energy certificates. Based on the disclosed data, we estimated the change in emission intensity of electricity grids over time (that is, the grid decarbonization), which is a fourth variable used in corporate emission accounting. We then estimated the contribution of the four variables to changes in reported emissions and assessed each company’s alignment with the goals of the Paris Agreement with and without the contributions from renewable energy certificates.