Transparency on the Path to Net-Zero

We propose and describe a corporate carbon reporting framework intended to strengthen the credibility and transparency of the existing net-zero pledges. We refer to this framework as the Time-Consistent Corporate Carbon Reporting (TCCR) standard. Firms adhering to the TCCR framework would commit to disclose: (i) firm annual carbon emissions determined according to a core metric which we define as the Direct Net Emissions (DNE), (ii) an initial forecast of the firm’s future emissions trajectory up to the year 2050, and (iii) periodic revisions of the forecast emission trajectories for the remaining years up to 2050. In addition to DNE disclosures at the corporate entity level, we advocate for firms to adopt a system of accumulating and reporting carbon balances at the product level. When added up across all products and services sold to the firm’s customers, these carbon balances would effectively absorb the firm’s annual DNE, and the carbon balances accumulated in the production inputs from the firm’s upstream suppliers. Borrowing a concept from the construction industry, this sequential process would ensure that products delivered to a firm’s customers reflect the embodied carbon accumulated through the entire upstream supply chain.