Ledger-Based Carbon Accounting Will Upend The GHG Protocol After 2030

On October 20, 2025, a new carbon accounting coalition, Carbon Measures, hit the market. Supported by prominent organizations across industry and finance – including BlackRock, BASF and ExxonMobil – and led by former EY Global Vice Chair for sustainability, Amy Brachio, Carbon Measures is committed to “establishing a more accurate carbon accounting framework and driving market-based solutions to reduce emissions”. In practice, Carbon Measures is advocating for a ledger-based carbon accounting system – a methodology designed to resolve some of the most recurring issues facing the GHG Protocol.

Carbon Measures is the latest champion for ledger-based accounting, but not its inventor. That honour goes to Professor Robert Kaplan, of Harvard Business School, who founded the E-liability Institute (now known as the E-ledgers Institute) in 2021. The concept is simple in theory, if not in practice: organizations assign emissions generated from a particular product to that product. These then become liabilities, which move to the purchaser’s ledger and off the producer’s ledger. This is basically a mimic of financial accounting – with accounts receivable and payable – and solves an inherent problem of the venerable but flawed GHG Protocol: double counting. If every entity reports on direct and indirect emissions, as the GHG Protocol suggests, then all business emissions are naturally double counted.

Ledger-based accounting also has major upsides from a financial perspective. For one, it would greatly simplify product level carbon accounting. It would also provide a greater commercial incentive for firms to reduce product level emissions and provide a tangible paper trail across a specific value chain. Auditing emissions data would become much simpler. Ultimately, ledger-based carbon accounting provides a solution to the impossible problem of accounting for indirect emissions that cannot be directly controlled by an organization.

While it solves many of the issues inherent in the GHG Protocol, ledger-based carbon accounting has until now remained an underground movement – esoteric knowledge discussed only by the most interested carbon accounting afficionados. It’s easy to see why: implementing new accounting protocols is an enormous ask, when the entire sustainability reporting ecosystem is based on the GHG Protocol. But the upside is clear: ledger-based accounting offers greater financial incentives for organizations taking serious action. Under the GHG Protocol, excessive flexibility means ‘creative’ accounting is all too easy.

Carbon Measures may just have the firepower to seriously challenge the GHG Protocol’s dominance. At least, it is a serious sign that major corporations are unhappy with the current, outdated carbon accounting methodologies. For technology developers, the opportunity is clear: new accounting methodologies, linked at the product level, will require new functionality. The risk? Why not just use existing ERP solutions that already manage product level invoicing. Either way, the change won’t happen overnight – Carbon Measures suggests it will take at least five to seven years to scale – but it’s a movement to keep an eye on.