Publications
Publications
- 2023
- HBS Working Paper Series
Toward Decision-Useful Carbon Information
By: Gunther Glenk
Abstract
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; Decarbonization; Carbon Accounting; Net-zero Emissions; Greenhouse Gas Emissions; Environment; Environmental Impact; Management; Sustainable Cities; Corporate Disclosure; Environmental Accounting; Environmental Management; Climate Change; Accounting Industry; Consulting Industry; Energy Industry; Auto Industry; Construction Industry; Transportation Industry; Financial Services Industry; Green Technology Industry; Industrial Products Industry; Information Technology Industry; Manufacturing Industry; Public Administration Industry; Steel Industry; Utilities Industry; Europe; North America; South America; Africa; Asia
Citation
Glenk, Gunther. "Toward Decision-Useful Carbon Information." Harvard Business School Working Paper, No. 24-026, September 2023. (TRR 266 Accounting for Transparency Working Paper Series, No. 121, May 2023.)