Toward decision-useful carbon information

Glenk, Gunther

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URL:	https://www.researchgate.net/publication/370637135...
URN:	urn:nbn:de:bsz:180-madoc-644719
Dokumenttyp:	Arbeitspapier
Erscheinungsjahr:	2023
Ort der Veröffentlichung:	Mannheim
Sprache der Veröffentlichung:	Englisch
Einrichtung:	Fakultät für Betriebswirtschaftslehre > Stiftungsprofessur für ABWL (Reichelstein 2018-)
Fachgebiet:	330 Wirtschaft
Fachklassifikation:	JEL: G18 , M14 , M41 , Q54 , Q56,
Freie Schlagwörter (Englisch):	carbon emissions , carbon accounting , decarbonization , net-zero pledges
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 GHG associated with a firm’s economic activity. Applying the taxonomy, I find that information prepared under the widely used Greenhouse Gas Protocol generally fails to represent a firm’s GHG emissions faithfully. Yet, if certain conditions prevailed, it would faithfully represent a share of those emissions. My findings highlight the need for revising the GHG Protocol as well as recently proposed carbon disclosure mandates and standards, which seek to produce decision-useful information but have also adopted the GHG Protocol.