CARBON ACCOUNTING IS MOVING BEYOND CORPORATE CLIMATE REPORTING. IT INCREASINGLY SHAPES TRADE, DISCLOSURE AND COMPETITIVENESS BY DETERMINING HOW EMISSIONS, REDUCTIONS, REMOVALS AND MARKET-BASED ACTIONS ARE RECOGNISED AND COMPARED.
IETA LAUNCHED ITS TASK FORCE ON CARBON ACCOUNTING IN JANUARY 2026 TO ENGAGE ACROSS THIS CHANGING LANDSCAPE AND ENSURE CARBON MARKETS AND OTHER MARKET-BASED INSTRUMENTS ARE CONSISTENTLY RECOGNISED IN EMERGING STANDARDS
ACCOUNTING RULES INFLUENCE WHICH CLIMATE ACTIONS COMPANIES CAN REPORT, COMPARE AND INVEST IN. ALIGNMENT CAN ENABLE COMPETITION BASED ON CARBON PERFORMANCE. FRAGMENTATION CAN CREATE DUPLICATIVE BURDENS, TRADE FRICTION AND A RISK THAT CREDIBLE MARKET-BASED ACTION IS EXCLUDED.
The GHG Protocol and ISO announced work in 2025 towards a unified corporate accounting standard and a jointly developed product-level accounting standard. The draft package also identifies a public consultation on the corporate standard in Q2 2027 and publication in 2028.
Emerging approaches include the multistatement reporting approach - as seen in the GHG Protocol’s Action and Market Instruments work (now part of the unified corporate accounting standard) - and ledger-based accounting. The central policy question is how standards transparently distinguish physical inventories from the emissions impacts of market instruments and corporate actions.
Accounting methods are increasingly connected to border carbon adjustments, product footprints and sustainability disclosure. The draft package identifies the EU CBAM (and soon-to-be UK CBAM), California Senate Bill 253, EU corporate sustainability requirements, ISSB disclosures and China’s product carbon footprint framework as important examples.
IETA supports clarified and consistent recognition of market-based climate action across carbon accounting standards. This includes carbon credits and offsets, emissions reductions and removals, environmental attribute certificates and lower-carbon chains of custody.
IETA also supports international harmonisation. Divergent accounting and reporting frameworks can increase compliance burdens and trade friction, while aligned standards can make carbon performance more comparable and strengthen incentives
GHG Protocol and ISO harmonisation announced
IETA Task Force launched
Public consultation planned for the unified GHGP-ISO corporate standard
Accounting determines whether and how emissions reductions, removals, credits and offsets are recognised in corporate reporting.
Product-level emissions data and methodological consistency affect border measures, import requirements and the comparability of carbon costs.
GHG accounting provides underlying information for sustainability disclosures and transition reporting.
Standards need clear treatment of certificates and contractual instruments that convey lower-carbon attributes.
Product-level standards can enable comparison across supply chains, but divergence may create duplicated reporting and trade friction.
Ledger-based models seek to track emissions and attributes through value chains, creating links to data infrastructure and assurance.
Multinational initiatives can help align policy and reduce fragmentation across markets, reporting systems and trade frameworks.