Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • Article
  • Harvard Business Review Digital Articles

We Need Better Carbon Accounting. Here's How to Get There.

By: Robert S. Kaplan and Karthik Ramanna
  • Format:Electronic
ShareBar

Abstract

Any effective system of greenhouse gas (GHG) accounting needs to measure each company’s supply-chain carbon impacts accurately. Such information would provide visibility and incentives for the company to make more climate-friendly product-specification and purchasing decisions. The current dominant system for carbon accounting, the GHG Protocol, misses this critical point by allowing companies to guestimate upstream and downstream emissions. To address this shortcoming, we "introduced" an E-liability accounting system, based on well-established practices from inventory and cost accounting, for accurately measuring GHG emissions across corporate supply chains. In this follow-up piece, we describe the basic flaw inherent in the GHG Protocol, explain why it has persisted, and offer a way forward for robust carbon accounting that does not involve rescinding the Protocol, which is already widely used in many global climate agreements. We conclude by identifying which companies stand to gain most from accurate GHG accounting and could be early adopters of the E-liability system.

Keywords

Accounting; Greenhouse Gas Emissions; GHG; Carbon Accounting; Environmental Accounting; Environmental Management; Governing Rules, Regulations, and Reforms; Supply Chain

Citation

Kaplan, Robert S., and Karthik Ramanna. "We Need Better Carbon Accounting. Here's How to Get There." Harvard Business Review Digital Articles (April 12, 2022).
  • Find it at Harvard
  • Read Now

About The Author

Robert S. Kaplan

Accounting and Management
→More Publications

More from the Authors

    • January 2023
    • Faculty Research

    Performance Management at Afreximbank

    By: Robert S. Kaplan and Siko Sikochi
    • January 2023
    • Faculty Research

    Brigham & Women's Hospital: Using Patient Reported Outcomes to Improve Breast Cancer Care

    By: Robert S. Kaplan
    • December 2022
    • Wisconsin Medical Journal

    Collaborative Rooming: An Innovative Pilot Project to Overcome Primary Care Challenges

    By: Gagandeep Singh, Jill G. Lenhart, Richard A. Helmers, Michele Renee Eberlee, Heather Costley, Joel B. Roberts and Robert S. Kaplan
More from the Authors
  • Performance Management at Afreximbank By: Robert S. Kaplan and Siko Sikochi
  • Brigham & Women's Hospital: Using Patient Reported Outcomes to Improve Breast Cancer Care By: Robert S. Kaplan
  • Collaborative Rooming: An Innovative Pilot Project to Overcome Primary Care Challenges By: Gagandeep Singh, Jill G. Lenhart, Richard A. Helmers, Michele Renee Eberlee, Heather Costley, Joel B. Roberts and Robert S. Kaplan
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College