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Net-Zero Promises Will Trigger Accounting Changes, Just Not Yet

Dec. 28, 2021, 9:45 AM

Scores of companies, from Amazon.com Inc. to Uber Technologies Inc., have pledged to get to net-zero carbon emissions by 2040.

Commitments to reduce reliance on fossil fuels by closing smoke-spewing factories or switching to hybrid or electric vehicles all cost money, and these commitments will have financial accounting implications.

Making long-term promises and setting goals won’t translate to financial statement liabilities just yet; that will happen as the promises turn closer to concrete actions.

Still, the undertaking could be so significant that companies and their accountants need to start plotting now how fundamental operational changes could impact the numbers they ...