Accounting for real decarbonisation of tech supply chains

This discussion paper by the NewClimate Institute evaluates scope 3 accounting practices in the technology sector and provides recommendations for standard-setting bodies including the GHG Protocol, ISO, and SBTi to ensure corporate emissions reductions reflect real-world decarbonisation.

• The author identifies a common malpractice where large technology companies apply market-based accounting to renewable electricity in their supply chains, despite GHG Protocol standards only allowing this for scope 2. This practice creates transparency and integrity issues, as reported scope 3 emissions reductions may be nominal rather than actual.
• The paper recommends that location-based accounting remain the primary basis for scope 3 reporting because it is the most robust method for assessing actual emissions. To complement this, the author suggests using non-GHG transition indicators and market-based accounting paired with hourly matching of renewable electricity as complementary ledgers.
• Regarding Product Carbon Footprint (PCF) accounting, the paper proposes that location-based emissions from energy use serve as the primary reference point. It argues that companies should only be permitted to claim lower emissions if the electricity is matched on an hourly basis and sourced from new Power Purchase Agreements (PPAs) on the local grid.

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} }