Toward Decision-Useful Carbon Information

26 Pages Posted: 10 May 2023 Last revised: 6 Sep 2023

See all articles by Gunther Glenk

Gunther Glenk

Harvard Business School; University of Mannheim - Business School; Massachusetts Institute of Technology (MIT)

Date Written: August 28, 2023


Companies are increasingly viewed as crucial drivers for timely decarbonization. Current accounting practices for greenhouse gas (GHG) emissions, however, often leave corporate carbon disclosures and abatement obscured. Here I introduce a taxonomy for assuring the quality of corporate carbon information. Analog to financial accounting standards, information on a firm's GHG emissions is to be "decision-useful" to stakeholders. That is, it is relevant and faithfully represents the actual changes in atmospheric GHGs associated with a firm's economic activity. Applying the taxonomy, I show that information prepared under the widely used Greenhouse Gas Protocol generally fails to represent a firm's GHG emissions faithfully. Yet, if firms complying with the GHG Protocol adopted the taxonomy, they could directly improve their disclosures by faithfully representing some of their emissions. My findings highlight the need to revise the GHG Protocol, as well as recently proposed carbon disclosure mandates that seek to produce "decision-useful" information but have also adopted the GHG Protocol.

Keywords: carbon emissions, carbon accounting, decarbonization, net-zero pledges

JEL Classification: G18, M14, M41, Q54, Q56

Suggested Citation

Glenk, Gunther, Toward Decision-Useful Carbon Information (August 28, 2023). TRR 266 Accounting for Transparency Working Paper Series No. 121, Available at SSRN: or

Gunther Glenk (Contact Author)

Harvard Business School ( email )

Cambridge, MA

University of Mannheim - Business School ( email )

Massachusetts Institute of Technology (MIT) ( email )

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