Accounting for real decarbonisation of tech supply chains

The paper argues that many large technology companies improperly apply market-based accounting to scope 3 emissions, creating a gap between reported reductions and actual environmental impact. It recommends that location-based accounting remain the primary basis for scope 3 reporting and Product Carbon Footprint (PCF) accounting, while suggesting that market-based accounting—specifically when paired with hourly matching and new Power Purchase Agreements (PPAs) on the local grid—should only serve as a complementary ledger.

• Large technology companies frequently use market-based accounting for renewable electricity in their supply chains despite GHG Protocol standards only allowing this for scope 2, which leads to emissions reductions that may exist only on paper rather than in reality.
• The paper recommends that location-based accounting be maintained as the primary method for scope 3 reporting and the primary reference point for Product Carbon Footprint (PCF) accounting because it is the most robust way to assess actual emissions.
• To incentivise real decarbonisation, the author proposes that lower emissions claims be permitted only if electricity is sourced from new Power Purchase Agreements (PPAs) on the local grid and matched on an hourly basis, with this and non-GHG transition indicators serving as complementary ledgers.

APA

NewClimate Institute (2026). Accounting for real decarbonisation of tech supply chains. http://www.newclimate.org/resources/publications/accounting-for-real-decarbonisation-of-tech-supply-chains

Chicago

NewClimate Institute. Accounting for real decarbonisation of tech supply chains. 2026. http://www.newclimate.org/resources/publications/accounting-for-real-decarbonisation-of-tech-supply-chains.

Wikipedia

{{cite report |author=NewClimate Institute |title=Accounting for real decarbonisation of tech supply chains |date=14 July 2026 |url=http://www.newclimate.org/resources/publications/accounting-for-real-decarbonisation-of-tech-supply-chains |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{newclimateinstitute2026accounting, author = {{NewClimate Institute}}, title = {{Accounting for real decarbonisation of tech supply chains}}, institution = {NewClimate Institute}, year = {2026}, month = jul, url = {http://www.newclimate.org/resources/publications/accounting-for-real-decarbonisation-of-tech-supply-chains}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }