Corporate climate reporting has never been more visible, yet more scrutinised. Companies publish glossy sustainability reports and CDP scores, set science‑based targets, and talk confidently about their “net‑zero pathways.” On the surface, it looks like progress. But underneath, a different picture emerges – one where companies self‑declare alignment with the Greenhouse Gas Protocol, curate their numbers to perfection, and present a far more optimistic story than the underlying reality supports. Recent research by members of the GreenWatch team discusses how easily these parallel narratives can diverge depending on the audience and the reporting format.
The Optimism Starts Early: Scope 1 Isn’t as Solid as We Thought
Scope 1 is meant to be the easy part – direct emissions from a company’s own operations, and therefore the number most people assume is hard, concrete, and accurate. Compared with Scopes 2 and 3, it is certainly more reliable. But ‘more reliable’ is not the same as unquestionable. Even Scope 1 rests on reporting choices: what sits inside the boundary, how emissions are measured or estimated, and which figures are presented in which disclosure. That leaves room not only for inconsistency, but for numbers to be framed in ways that make performance look more robust than it really is.
The result is multiple versions of the same story. This isn’t necessarily deception – it’s just the natural outcome of a system that lets companies choose the framing that works best for the audience in front of them.
Scope 2: Where Optimism Becomes a Feature, Not a Bug
If you think Scope 1 is shaky, Scope 2 is where the clean look comes from the ledger, not the grid. Under the market‑based method, companies can buy renewable energy certificates (RECs) or Guarantees of Origin (GOs) and instantly report zero emissions from electricity. It’s a clean number, a simple narrative, and a powerful way to show progress.
But the academic consensus is blunt: these instruments rarely drive new renewable energy generation. They don’t change the grid. They don’t change the physics. They just change the accounting.
However, that does not mean all market-based instruments carry the same weight. Power purchase agreements (PPAs), as a more bundled form of procurement, are often seen as more credible than unbundled certificates. This is because they are linked more directly to a specific generation asset and can, in some cases, help bring new renewable capacity into the system. But even here, the climate value is not automatic. It depends on whether the arrangement is genuinely additional, whether the power is generated on the same grid, and whether it is produced at the time the electricity is actually being consumed. Without that alignment, even bundled procurement can support emissions claims that look cleaner on paper than the underlying energy mix would justify.
Scope 3: The Optimism Peaks
Scope 3 is where companies take the widest interpretive flexibility – and where optimism becomes almost unavoidable. The Greenhouse Gas Protocol is a voluntary framework, and companies can choose how closely to align with it. This standard gives discretion over the decision of boundaries, materiality assessment, and which data and estimation methods to use.
So what happens?
Scope 3 disclosures become partial, selective, or strategically framed. Some companies report only the categories that look manageable and simple to report, rather than those largest in absolute numbers. Others estimate emissions using methods that produce lower numbers. And many simply avoid the categories that are hardest to measure.
Offsets: The Final Layer of Optimism
Offsets are meant to complement reductions, not replace them. But in practice, they often serve as a pressure valve – a way to meet targets without changing operations.
The review highlights major issues with the Clean Development Mechanism (CDM), the world’s largest offset program:
- Over half of CDM projects would have happened anyway
- Audits are inconsistent
- Some projects have been linked to human rights violations
Offsets promise climate impact. But too often, they deliver accounting impact instead.
Why Does Optimism Thrive? Because the System Rewards It
The most revealing insight from the paper isn’t about emissions at all. It’s about incentives. Companies do what the system encourages:
- They tailor disclosures to different audiences
- They choose market‑based numbers that look cleaner
- They report Scope 3 selectively
- They use offsets to close gaps
- They emphasise future ambition over present reality
The Real Risk: We Mistake Progress on Paper for Progress in the World
When disclosures are built on optimistic assumptions, stakeholders inherit that optimism, whether they are investors, regulators, rating agencies, policymakers, or civil society.
This is because the targets look achievable. The pathways look credible. Strategies look aligned with 1.5°C. But the underlying emissions reality is often far more complex – and far less flattering. If we want real climate progress, we need reporting systems that reward accuracy, not appearance. Systems that prioritise additionality over accounting. Systems that recognise uncertainty instead of smoothing it away.
Vadim Dunne, GreenWatch, 22/05/2026