Center for Advancing Accounting

Tracking Scope 3 Greenhouse Gas Emissions in a Manufacturing Value Chain with Blockchain

• In Event: Emissions - Disclosure and Tracking

Abstract

For a company to report greenhouse gas emissions generated within its value chain, it must identify self-generated emissions (i.e., Scope 1), emissions from power providers (i.e., Scope 2), as well as emissions from upstream suppliers and downstream customers (i.e., Scope 3). Considering the complexities of reporting emissions generated by third-parties, this study evaluates blockchain as a tool to track and report Scope 3 emissions. Blockchain is uniquely positioned to track emissions as they move between members of a value chain given its (1) shared ledger of events stored in a tamper-resistant ecosystem, (2) non-fungible tokens that can uniquely represent a product’s emissions at a specific point in the value chain, and (3) smart contracts that ensure a complete and accurate transfer of emissions between parties. This study applies the Design Science Research Methodology to evaluate blockchain’s ability to track Scope 3 greenhouse gas emissions in a manufacturing value chain.

Authors

• Mark Donald Sheldon, John Carroll University

• James Gregory Jenkins, Auburn University

• Eric Negangard, University of Virginia