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

Author

Listed:
  • 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)

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.

Suggested Citation

  • Julian Baehr & Florian Zenglein & Guido Sonnemann & Markus Lederer & Liselotte Schebek, 2024. "Back in the Driver’s Seat: How New EU Greenhouse-Gas Reporting Schemes Challenge Corporate Accounting," Sustainability, MDPI, vol. 16(9), pages 1-20, April.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:9:p:3693-:d:1385153
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    References listed on IDEAS

    as
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    2. Green Jessica F, 2010. "Private Standards in the Climate Regime: The Greenhouse Gas Protocol," Business and Politics, De Gruyter, vol. 12(3), pages 1-39, October.
    3. Breeda Comyns & Frank Figge, 2015. "Greenhouse gas reporting quality in the oil and gas industry," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 28(3), pages 403-433, March.
    4. Le Luo & Qingliang Tang & Yi‐Chen Lan, 2013. "Comparison of propensity for carbon disclosure between developing and developed countries," Accounting Research Journal, Emerald Group Publishing Limited, vol. 26(1), pages 6-34, July.
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