Three Levers of Emission Control (3-LoEC)-Model: At the Core of GHG Emission-Management Control Systems

Abstract

The Corporate Sustainability Reporting Directive (CSRD) requires from European enterprises to intensively engage in reporting and monitoring their sustainability related performance. Known as “climate-first” approach, fighting climate change has become the priority in politics. To contribute to that aim, companies face new regulations with a special focus on their greenhouse gas (GHG) emission performance. For the product specific measurement of GHG emissions, references are given to the methodology proposed in the established GHG Protocol Product Standard (GHG Protocol, 2011). In this standard the product’s GHG emission – subsequently called “unit carbon footprint” (uCFP) – is measured via a generic activity-based methodology. Due to its deliberately generic definition, this methodology constitutes a conceptual model that contains no operationalization which is needed for practical implementations. In this paper this gap is closed by introducing the “3-Levers of Emission Control (3-LoEC)”-model, which has the following advantages: it measures the uCFP via three levers of emission control that are related to the consumption and procurement of energy, it is connected to data contained in activity-based costing (ABC) systems, and it is a forecasting instrument so that it is at the core of activity-based GHG emission budgeting and the corresponding management control system (MCS) with respect to GHG emission.