Two companies can burn the same amount of fuel, yet one may report half the carbon footprint of the other. That is the finding of a new study, which reveals that the way companies choose to count their emissions can dramatically change the numbers they publish. The research, published in the United States, suggests that current carbon accounting practices are far from standardized, and the differences are large enough to mislead investors and regulators.
The same factory, two very different numbers
The study looked at how companies account for emissions from their supply chains, particularly those from purchased goods and services. Depending on the method used, a company's reported footprint could vary by as much as 50 percent. That means a firm could appear to be a climate leader or a laggard simply by picking a different accounting approach.
Researchers compared several common accounting frameworks and found that they produce wildly different results for the same set of activities. The choice of whether to use supplier-specific data or industry averages, for example, can swing the final number significantly. The study also found that some methods allow companies to exclude certain indirect emissions entirely, which can shrink their reported footprint even further.
Why local communities and investors should care
The study's authors point out that these inconsistencies are not just a technical nuisance. In the United States and around the world, companies use their reported emissions to set climate targets, attract green investment, and comply with emerging disclosure rules. If the numbers can be cut in half by changing the accounting method, then those targets and investments may be built on shaky ground.
Local communities also rely on corporate emissions data to hold polluters accountable. When a company announces a net-zero pledge, the public assumes the underlying numbers are reliable. But the study shows that without a single, mandatory standard, companies can present a rosier picture than reality.
The researchers call for greater harmonization of carbon accounting rules, arguing that the current patchwork of voluntary guidelines is not enough. They note that regulators in several countries are already moving toward mandatory climate disclosure, but the study suggests that those rules will only work if they also standardize how emissions are calculated.
In the end, the study is a reminder that what gets measured gets managed, but only if the measurement is consistent. As more companies rush to publish climate pledges, the numbers behind those promises deserve as much scrutiny as the promises themselves.
