Harmonizing corporate carbon footprints

Abstract

Global greenhouse gas emissions need to reach net-zero around mid-century to limit global warming to 1.5 °C. This decarbonization challenge has, inter alia, increased the political and societal pressure on companies to disclose their carbon footprints. As a response, numerous companies announced roadmaps to become carbon neutral or even negative. The first step on the journey towards carbon neutrality, however, is to quantify corporate emissions accurately. Current carbon accounting and reporting practices remain unsystematic and not comparable, particularly for emissions along the value chain (so-called scope 3). Here we present a framework to harmonize scope 3 emissions by accounting for reporting inconsistency, boundary incompleteness, and activity exclusion. In a case study of the tech sector, we find that corporate reports omit half of the total emissions. The framework we present may help companies, investors, and policy makers to identify and close the gaps in corporate carbon footprints.

Global oil refining's contribution to greenhouse gas emissions from 2000 to 2021

“…Analyzing GHG emissions during the refining process in key refineries will support the targeted implementation of emission reduction technologies, and thus drive countries and enterprises to take action on mitigation. 9 , 30 …”

Pharmaceutical Company Targets and Strategies to Address Climate Change: Content Analysis of Public Reports from 20 Pharmaceutical Companies

“…For example, an analysis of food and beverage companies demonstrated that 7 of the largest 50 companies did not report emissions, and that reporting, especially of scope 3 emissions, is incomplete [ 35 ]. A case study of the tech industry found that corporate reports omit half of company GHG emissions [ 36 ], while a study of manufacturing companies found low levels of emission disclosure [ 37 ]. In addition, while all but one company in our study had reported climate change targets, few of these targets covered scope 3 emissions, again comparable with other industry targets [ 35 , 38 ].…”

Make greenhouse-gas accounting reliable — build interoperable systems

“…Data gaps and inconsistent application of accounting standards lead to widespread undercounting of emissions. For example, only one-third of suppliers provide information on their indirect emissions to customers 4 , leading companies to report different levels of emissions for similar activities. In the technology sector, proper inclusion of indirect emissions from purchased goods and product usage can double emissions estimates 4 .…”