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Accounting is the language of sustainability: a measurement framework for carbon accounting

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  • Peter Easton
  • George Ruch
  • Gary Taylor

Abstract

We explore the prospects of adapting financial accounting concepts to sustainability accounting. To illustrate, we introduce a carbon accounting measurement framework for net-zero pledges that parallels the financial reporting framework for US lease accounting (ASC Topic 842). Under this framework, entities prepare emission reduction schedules to achieve net-zero targets by a specific date. This proposed framework creates pledge asset and liability accounts (the present value of projected emissions) as beginning balances, which are amortised like lease assets and liabilities. A carbon flow statement tracks actual emissions and pledge variances, providing information regarding an entity’s progress toward its net-zero target. Significant variances may result in a revised emission reduction schedule or target date. The pledges may be monitored and audited.

Suggested Citation

  • Peter Easton & George Ruch & Gary Taylor, 2025. "Accounting is the language of sustainability: a measurement framework for carbon accounting," Accounting and Business Research, Taylor & Francis Journals, vol. 55(5), pages 542-560, July.
    • Handle: RePEc:taf:acctbr:v:55:y:2025:i:5:p:542-560
    DOI: 10.1080/00014788.2025.2516282
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