Market-based instruments (MBIs) are becoming increasingly important in corporate climate strategies. The term covers a diverse set of tools, including commodity certificates, energy attribute certificates and contractual purchasing arrangements, that use market and pricing mechanisms to help companies address climate-related challenges. In some cases, these instruments may help channel finance to lower-emissions production, create demand signals for key sectoral transitions and enable companies to account for interventions that are difficult to recognise through conventional physical inventories alone.
However, the potential value of these instruments depends fundamentally on how they are designed, governed and used. Without robust guardrails, they risk creating misleading impressions of progress, weakening incentives for direct value chain decarbonisation and supporting incremental measures that delay the deployment of genuinely transformative technologies. 
The critical question is therefore not whether MBIs should be accepted in principle, but under what conditions they can credibly contribute to real-world decarbonisation.
Across our five-part blog series 'Market Instruments Explained', we have explored the opportunities and risks associated with different types of MBIs in corporate GHG accounting. Read here the compilation of "Market instruments explained", containing:

• 1/5: Promises and risks for corporate climate action
• 2/5: Mass balance – one term, many different approaches
• 3/5: Matching book-and-claim rules to real-world impact
• 4/5: Why transition indicators should play a central role in a multi-statement GHG framework
• 5/5: Key takeaways and the way forward

 The following key takeaways aim to support a more nuanced and constructive debate on their role in corporate GHG inventories and target-setting frameworks.

Key takeaways:

• The nuances matter to avoid polarised debates: Discussions on the eligibility and conditions for using market-based instruments must consider THE differences between approaches and cannot be generalised. For example, debates about whether ‘credit mass balance’ or ‘book-and-claim’ should be included in any particularly GHG reporting statement or target-setting approach are likely to become polarised and lead to poor outcomes, since these umbrella terms refer to a family of very different approaches. 
• The ISO categorisations of mass balance do not provide sufficient nuance: The two types of mass balance outlines by ISO  22095-2:2026, the ‘rolling average percentage method’ and the ‘credit mass balance model’, remain umbrella terms that could include a very wide number of different approaches. 
• Book-and-claim has a legitimate role, but its credibility depends on why it is being used: Book-and-claim is not simply a weaker version of mass balance; it serves a distinct function where physical traceability is infeasible or where low-carbon technologies are not yet physically accessible to buyers. Positioning it as inherently less credible because it lacks physical connectivity overlooks its distinct role and could legitimise weaker mass balance approaches. The credibility of book-and-claim depends on why it is being used. Different use cases, such as addressing traceability constraints or supporting the scale-up of emerging technologies, may require different rules and safeguards. Without this differentiation, book-and-claim can mislead stakeholders about progress, reduce incentives for direct supply chain transformation and create serious risks of double counting and misattribution
• Robust governance and controlled application matters for scaling up the use of MBIs. While MBIs may offer promising potential to address legitimate challenges in some parts of the economy, their governance is inherently complex. The more these systems expand across different commodities, technologies and use cases, the harder it becomes to ensure consistent rules, robust oversight and credible claims. There is a risk of becoming overly optimistic about their theoretical potential without sufficient attention to the practical difficulties of governing them at scale.  
• MBIs can be highly relevant for non-GHG transition indicators: Non-GHG transition indicators provide more tangible and decision-useful ways of assessing whether companies are progressing on the real sectoral transitions required for net zero. While much of the debate focuses on how MBIs could be used within companies’ GHG inventories, market instruments can also be integrated into non-GHG transition indicators, and this may be a more transparent way to use some instruments.