Challenges for the Accurate Measurement and Accounting of Corporate Greenhouse Gas Emissions
60 Pages Posted: 9 May 2023
Date Written: May 5, 2022
As climate-related concerns and the urgency for rapid decarbonization become more prevalent, companies face an ever-increasing pressure to disclose accurate information on their greenhouse gas (GHG) emissions. In this context, companies often struggle to ensure the validity and accuracy of GHG emission calculations published and frequently remain reluctant to intensify their efforts due to perceived ambiguity and clarity on their true carbon footprint. This potentially results in substantial deviations between GHG emission data actually incurred and publicly reported. We attempt to identify the drivers at the root of these deviations. To this end, we conduct a multiple-case study among 14 large, public companies operating in emission-intensive sectors. The study reveals that GHG accuracies mostly result from challenges regarding the application of available standards and initiatives, the collection and calculation of GHG emission data along scopes 1, 2 and 3, the transparency, motivation and target definition of published reports as well as objectives and quality of external verification by auditors. To address the identified issues, we outline and discuss possible courses of action to improve greenhouse gas accounting practices, frameworks and policies.
Keywords: Carbon Accounting, Sustainability Accounting, Industrial Decarbonization
JEL Classification: M41, M42, Q56
Suggested Citation: Suggested Citation