Back in the Driver’s Seat: How New EU Greenhouse-Gas Reporting Schemes Challenge Corporate Accounting

Julian Baehr (), Florian Zenglein, Guido Sonnemann, Markus Lederer and Liselotte Schebek
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Julian Baehr: Institute IWAR Material Flow Management and Resource Economy, Technische Universität Darmstadt, 64287 Darmstadt, Germany
Florian Zenglein: Department of International Relations, Institute for Political Science, Technische Universität Darmstadt, 64283 Darmstadt, Germany
Guido Sonnemann: Institute of Molecular Sciences, University of Bordeaux, Centre National de la Recherche Scientifique, Bordeaux INP, ISM, UMR 5255, 33400 Talence, France
Markus Lederer: Department of International Relations, Institute for Political Science, Technische Universität Darmstadt, 64283 Darmstadt, Germany
Liselotte Schebek: Institute IWAR Material Flow Management and Resource Economy, Technische Universität Darmstadt, 64287 Darmstadt, Germany

Sustainability, 2024, vol. 16, issue 9, 1-20

Abstract: Greenhouse-gas (GHG) reporting schemes for companies are increasingly part of climate-mitigation policies worldwide. Notably, the European Green Deal (2019) boosts new public regulations that oblige companies to compile GHG emission inventories, i.e., account for their emissions in a given system boundary. Along with this boost, the workload for companies increases; at the same time, the quality of reporting is questioned. Given the overarching goal to improve companies’ climate-mitigation performance, the quality of reporting is inseparably connected to the quality of the respective accounting. However, the literature discusses carbon accounting as a universal umbrella term focusing on managerial issues, thus disregarding the crucial role of accounting methodologies in the sense of calculation approaches. In this publication, we apply an analytical approach introducing a clear differentiation between the task of quantitatively accounting for GHG inventories and the task of reporting results from calculated inventories in response to stakeholder or policy expectations. We use this approach to investigate European GHG reporting schemes and related GHG accounting methodologies in detail. Our findings indicate that the current phase of the European Green Deal depicts a quantitative growth in reporting schemes and a significant qualitative change by shifting from formerly voluntary to mandatory reporting schemes, along with the application of accounting methodologies originally not intended for politically compulsory purposes. We analyze the consequences of this shift, which poses new challenges for companies and policymakers, i.e., data-management concepts and refined methodological frameworks.

Keywords: carbon accounting; European Green Deal; industrial ecology; net-zero; reporting scheme; sustainable policy (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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