The application of consequential methods to corporate greenhouse gas accounting.

The title of the research is "The application of consequential methods to corporate greenhouse gas accounting". Carbon accounting involves measuring the amount of greenhouse gases emitted to the atmosphere, or estimating the effectiveness of decisions aimed at reducing emissions. There is a growing interest in carbon accounting as governments, companies, and consumers seek to understand their contribution to climate change, and look for ways of reducing that impact. Carbon accounting is important for understanding how much we are emitting, and how effective we are at reducing emissions.

Companies undertaking carbon accounting currently use what can be described as an "attributional" approach. This approach aims to quantify the emissions from a company's own operations, and from its supply chain. However, such methods do not always capture the total greenhouse gas impacts caused by a company's decisions or actions, and because of this it is possible that businesses will make poor decisions (i.e. they may undertake an action with the intention of reducing emissions, but may actually increase emissions).

An alternative form of carbon accounting is called "consequential" accounting, which aims to estimate the total change in greenhouse gas emissions caused by a decision or action. At present consequential methods have not been widely recognised or applied for informing corporate decision-making as corporate carbon accounting is dominated by attributional methods. This research project aims to explore the applicability consequential methods for corporate decision-making by applying a number of different consequential methods to business decision case studies.

The research will also explore the difference between attributional and consequential results in order to see if attributional methods give a reasonable estimate of total changes in emissions, or whether there are large changes in emissions which are not captured by conventional attributional carbon accounting practices (and therefore whether current practice is not sufficient for supporting effective decision-making).

Who will benefit from the research? The principal academic beneficiaries will be researchers involved in the study of corporate carbon accounting, and carbon accounting more generally. The research may also benefit researchers involved in the study of financial accounting, and also other forms of social and environmental accounting.

Other beneficiaries are likely to include: business managers involved in decision-making related to corporate climate change mitigation policies; institutional investors; environmental non-governmental organisations involved in campaigning for responsible corporate behaviour in relation to climate change; carbon accounting standard developers (such as the World Resources Institute, ISO, BSi, and Climate Disclosure Standards Board); and sustainability consultancies and service providers.

How will they benefit from the research? It is anticipated that academic beneficiaries will benefit from the introduction of new concepts which capture a fundamental distinction between different forms of carbon accounting. This should allow a new understanding of the different forms of carbon accounting, and the uses for which they are appropriate. This distinction should also open up new areas of research related to quantifying the total greenhouse gas impacts of business-decisions.

Other beneficiaries should benefit from a greater awareness of the choice of consequential carbon accounting methods that are available for informing business decisions. There will also be benefits from greater awareness of the limitations of purely attributional accounting, and the need for consideration of system-wide impacts. Ultimately there should be benefits through improved business decision-making, in terms of selecting options which most effectively reduce or avoid greenhouse gas emissions.