A new CEO Guide from the World Business Council for Sustainable Development (WBCSD) introduces what it calls a critical unlock for corporate decarbonization: the “Climate-related Corporate Performance and Accountability System”, or CPAS.
The premise is simple. Business is not moving fast enough to stay within 1.5°C. And one of the biggest barriers isn’t technology, it’s misalignment between corporate performance systems and financial market incentives.
The core problem: misalignment
The “Climate-related Corporate Performance and Accountability System (CPAS) CEO Guide“, argues that climate ambition is colliding with outdated financial logic.
Among the friction points:
- Valuation models that do not fully price climate risks and opportunities
- Financial accounting that remains largely backward-looking
- Credit and sustainability ratings sending mixed signals
- Corporate performance systems still driven by discounted cash flow models that exclude climate impacts
At the same time, regulatory disclosure regimes are pushing companies toward compliance-heavy reporting rather than transformation-focused strategy.
The result: business incentives are not consistently aligned with the pace of decarbonization required.
What CPAS actually is
CPAS is not another reporting framework. It’s a full integration model that embeds climate into every layer of corporate decision-making:
- Governance
- Risk assessment
- Strategy and transition planning
- Performance management
- Disclosure and assurance
- Investor relations
The goal is to move climate from the sustainability team to the core of finance, capital allocation, and valuation.
If companies integrate climate risks and opportunities into performance systems, the guide argues, they will produce decision-useful data that financial markets can price accurately.
From performance to capital allocation
The guide maps out a four-step logic:
- Integrate climate risks and opportunities into performance management
- Disclose decision-useful, finance-grade information
- Enable valuation models to price climate performance
- Shift capital allocation toward companies driving decarbonization
In other words, CPAS is designed to connect internal transformation with external capital markets.
What CEOs are expected to do
The guide lays out a practical agenda for leadership teams:
On governance:
- Ensure board-level climate competence
- Integrate climate into audit and risk committees
- Embed climate priorities into executive incentives
On risk and strategy:
- Integrate physical and transition risks into enterprise risk management
- Expand time horizons for risk assessment
- Develop science-informed net-zero targets
- Build climate transition plans tied directly to capex and R&D allocation
On performance and reporting:
- Measure Scope 1, 2, and 3 emissions
- Invest in robust internal control systems for climate data
- Align reporting with ISSB S1 and S2
- Prepare for assurance and investor scrutiny
The emphasis is clear: this goes beyond compliance. It’s about redesigning how companies create and measure value.
Why valuation is central
A dedicated section focuses on integrating climate into valuation inputs, including:
- Revenue and capex forecasts
- Cost of capital
- Discount rates and risk premiums
- Asset and terminal value assumptions
The guide references concerns from financial institutions that climate risks may still be underpriced in markets. Strengthening financial connectivity is framed as a transition enabler.
If markets can properly price climate exposure and performance, capital should flow toward credible transition leaders.
A broader accountability shift
The guide situates CPAS within rising global expectations for corporate accountability, referencing:
- International Sustainability Standards Board standards IFRS S1 and S2
- The United Nations Framework Convention on Climate Change Recognition & Accountability Framework
- Calls for science-based targets and transition plans
It also signals that climate is only the beginning. Similar performance and accountability systems are likely to expand into nature, circularity, and equity.
The readiness question
The guide includes a detailed readiness check for CEOs, asking whether:
- The CFO owns climate integration
- Climate risks are embedded in enterprise risk management
- The board has sufficient climate expertise
- Scope 3 data is robust and finance-grade
- Investor relations can clearly communicate the transition story
The implication is direct. The era of climate commitments without system-level integration is ending.
So here’s the real question for leadership teams:
is your climate strategy integrated deeply enough into performance, valuation, and capital allocation to withstand market scrutiny?
CEO Guides related
How should CEOs prepare for weather shocks that can halt whole value chains?
How should companies quantify the financial impact of climate risk?
How should CEOs approach climate-related financial disclosures now?
Source: World Business Council for Sustainable Development (WBCSD) “Climate-related Corporate Performance and Accountability System (CPAS) CEO Guide“, December 1, 2013
