E-liability in action

What needs to happen to make E-liabilities the global default in carbon accounting?

Three things: (1) Ambitious companies seeking a competitive advantage on carbon efficiency need to lead on E-liability in their supply chains (several are already in-process). (2) Auditors and ERP providers need to develop off-the-shelf E-liability products (several are already in-process). (3) Governments and rulemakers need to jointly embrace a three-year phase-out of industry-average data in Scope 3 reporting. (Can you help us with this? Then, email us please.)

Which organizations make good pilots of E-liability accounting?

(1) Those with significant upstream and direct emissions for a given product or service. (2) Those with a potential competitive-advantage in GHG emissions from their own production and/or supply-chain. (3) Those with GHG-sensitive customers and investors.

Read this slide deck to learn more.

What does an E-liability pilot look like?

Read the free case study here on what it means for an organization (business, government, or not-for-profit) to run an E-liability pilot. Learn more about the process, the timeline, the resources needed, and the value generated from a pilot.

How can the GHG Protocol Scope 3 standard incorporate E-liability?

The Scope 3 standard can be updated with three simple amendments: (1) Separate the accounting for upstream emissions “acquired” by an entity from the reporting of its downstream impact. (2) Except where such acquired emissions are immaterial, use only primary data (i.e., supplier-specific, product-level data) in the accounting. (3) As the entity sells/transfers its own products/services to customers, it should “debit” its emissions liability account (this avoids the multiple-counting problem of Scope 3).

If you can help us communicate these three simple fixes to the GHG Protocol’s leadership and key stakeholders, please email us.

Learn more about E-liability in action

Harvard Business Review: Getting a Clearer View of Your Company’s Carbon Footprint by Robert S. Kaplan, Karthik Ramanna, and Stefan J. Reichelstein (April 3, 2023)

Professors Robert Kaplan (Harvard), Karthik Ramanna (Oxford), and Marc Roston (Stanford) discuss their paper on Accounting for Carbon Offsets. Read the paper here.

Robert Kaplan Interview: Global Peter Drucker Forum

Karthik Ramanna on the Oxford Policy Pod