Frequently Asked Questions
On the E-ledgers approach
The E-ledgers Institute’s mission is to advance the E-ledgers methodology as the global gold-standard for emissions accounting.
The E-ledgers methodology introduces a simple, accurate, and verifiable approach to calculate the incurred net emissions of any product, service, organization, portfolio, or jurisdiction.
Our co-founders developed the E-ledgers methodology to accurately and verifiably track product-level emissions and removals, in real time, across even the most complex supply chains. Data recorded on E-ledgers is comparable across products and companies, enabling all organizations to benchmark their performances. E-ledgers information empowers organizations and jurisdictions to make data-driven decisions to drive innovation, improve energy efficiency, and reduce global emissions.
The Institute helps pioneering organizations pilot the E-ledgers method. We disseminate the experiences and learnings from the pilots, including recommending economy-wide standards for best practice. We also collaborate with a wide range of organizations, helping them build the infrastructure and enabling processes required for widespread adoption of E-ledgers.
Read about the E-ledgers method and how it works in practice
Traditional product-level carbon accounting approaches – such as Life Cycle Assessments (LCAs) or Environmental Product Declarations (EPDs) – are typically produced every few years and rely on top-down estimates. They provide static snapshots, are often not comparable across companies, and don’t reflect real-time decision-making.
E-ledgers accounting offers a fundamentally different approach:
- Bottom-up and transaction-based: Emissions are calculated and verified once at the point where they occur, allocated to output products and services, and passed down to customers like in a value-added system.
- Dynamic and specific: The E-ledgers method generates real-time, batch-level, and supplier-specific data, revealing how emissions vary across different sourcing, design, and production decisions.
- Comprehensive and full-allocation: All emissions are counted, and they are counted only once. Joint and site-level emissions (e.g., for shared infrastructure and utilities) are allocated using causal links to relevant outputs.
- Focused on cradle-to-gate: The E-ledgers approach tracks actual and verifiable emissions up to the point of transfer to the next entity in a value chain, avoiding speculation about emissions expected downstream. Thus, under the approach, all value-chain emissions are counted but only from that point in the chain where incurred.
The result is decision-useful emissions data that reflects how an organization’s current operations truly perform.
Read more about how the E-ledgers approach compares to other approaches to carbon accounting
Learn about the key differences between E-liability and EPDs
The E-ledgers framework is a system solution – it provides more accurate results as more entities across the economy use the approach. But the approach does not require all entities to use the approach all at once. Rather, adoption can be staggered within entities (more important products first), across entities (larger emitters first), and across jurisdictions. In that sense, the approach is “recursive” in nature. That simply means breaking a large, complex problem, such as accurately calculating the embedded emissions of all products that transact in the economy, into smaller, manageable iterations, so that each iteration builds on the previous one, progressively improving outcomes.
Each time a product is measured using the E-ledgers method, it helps improve the accuracy of the products that depend on it in the supply chain. Over just a few reporting cycles, this process can dramatically improve the quality of product-level emissions data across the economy, making it reliable enough to inform decision-making.
This is a key difference between E-ledgers and traditional emissions reporting, which typically uses static, entity-level estimates. E-ledgers are built on accounting principles that carry emissions data forward through the value chain. Given the circularity of value chains, even if the initial data is of poor quality, progressive adoption of the E-ledgers method means the data gets better over time.
Learn from organizations that have piloted the E-ledgers framework
On the Institute’s work
There are several ways to collaborate with the E-ledgers Institute, depending on your organization’s goals, capabilities, and stage of emissions accounting readiness.
i. Pilot the E-ledgers approach
We work with companies, governments, and other organizations to test and refine the E-ledgers methodology through real-world pilots. These pilots are a crucial step in generating product-level emissions data, identifying implementation pathways, and demonstrating the value of accurate, real-time emissions tracking.
Learn more about the pilot process
ii. Help move E-ledgers to enterprise-wide scale
We collaborate with technology providers, audit firms, and consulting firms that are committed to helping organizations move from pilot projects to enterprise-wide adoption of the E-ledgers methodology. Scalable solutions are essential to achieving widespread, reliable, and interoperable implementation across industries and jurisdictions.
We are especially interested in working with organizations that are testing platforms with corporate users and gathering insights on how those users are deploying the E-ledgers framework in practice.
Learn more about enabling E-ledgers to scale
iii. Join our global network of collaborators
Transforming emissions accounting requires a broad coalition of champions across industries, governments, academic institutions, and civil society. Whether you’re advancing policy, supporting research, or building enabling infrastructure, we’d love to connect.
Piloting the E-ledgers method gives your organization access to accurate, verifiable, and real-time emissions data at the product-level, enabling smarter decision-making, and more credible sustainability claims.
By adopting the E-ledgers approach, your organization can:
- Simplify and strengthen emissions accounting: Reduce reliance on industry estimates and streamline reporting with precise, transaction-based data that can aggregate up to the entity-level.
- Compete on emissions performance: Provide trusted, product-level emissions information to customers, turning lower-emission products into a meaningful market advantage.
- Unlock energy-efficiency opportunities: Identify where emissions occur across your operations and supply chain, and collaborate with key partners to reduce them.
- Demonstrate accountability: Show shareholders, investors, regulators, and NGOs that you’re measuring what matters and creating value therein.
Learn about what a pilot looks like
Learn from organizations that have piloted the E-ledgers framework
E-ledger pilots are designed around a specific problem an organization wants to solve, such as understanding how to build an energy-competitive product. The goal of the pilot is to build a first version of a system that can dynamically calculate the carbon content of inputs, processes, and outputs.
Key steps in the pilot process include:
- Scoping the pilot by identifying one or more products to assess, mapping production processes, and defining key emissions sources.
- Engaging suppliers and other partners to gather primary data and build buy-in.
- Collecting emissions data to allocate across outputs.
- Analyzing the results to generate insights and then sharing these results internally and externally.
Our Proto-Standard is freely available for public use, and we offer, where feasible, pro-bono technical guidance to organizations piloting E-ledgers accounting. The Institute works closely with pilot teams at every stage – from scoping to final analysis – and typically meets every 2-4 weeks to support progress and address questions. Most pilots take about 6 months from start to finish, depending on data availability, supplier engagement, and internal alignment.
On the E-liability principles
Looking for detailed guidance on implementing the E-liability framework? Start with the Proto-Standard for product-level emissions accounting and auditing using the E-liability method.
For additional support, explore the technical FAQs below, where we answer common questions about data, methodology, and system integration.
Embedded emissions are those from all upstream activities (i.e., those incurred by suppliers, their suppliers, etc., in producing inputs to a given output) through to those from an entity’s own operational activities to produce an output. Embedded emissions are often referred to as cradle-to-gate emissions.
A firm can account for their embedded emissions using the E-liability algorithm as follows:
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- Measure the direct emissions from its own operations (recorded only once).
- Obtain from its immediate (or tier-one) suppliers the emissions embedded in products it has purchased.
- Allocate the sum of (1) and (2) to its outputs.
- Transfer those emissions to its customers when those outputs are sold, akin to inventory accounting.
Watch a video on how to measure direct emissions
Learn about accounting for direct and purchased emissions on page 22 of our Proto-Standard
Electricity is treated like any other purchased input under the E-liability method, unless the reporting entity owns generation assets. The electricity supplier reports emissions per kilowatt-hour (kWh), covering, for instance: direct emissions from fossil fuel use (where relevant); depreciation of emissions from generation, transmission, and distribution infrastructure; and emissions from line losses during delivery.
This contrasts with the GHG Protocol, where electricity emissions (Scope 2) are reported by the buyer, not the producer, and infrastructure-related emissions are placed in Scope 3. By splitting capital and operating emissions, the GHG Protocol’s approach often underestimates the full carbon footprint of electricity production.
Learn more about the treatment of electricity emissions on page 24 of our Proto-Standard
Emissions should be allocated using causal logic – a deductive, empirically grounded method that reflects how emissions arise during production. This ensures allocations are grounded in physical reality, auditable, and consistent with input-process-output flows. The total emissions associated with a process must equal the total allocated to outputs: allocations cannot create or destroy emissions.
Learn more about the causal logic principle on page 16 of our Proto-Standard
The E-liability method is a full-allocation system, which means all emissions incurred by an entity must be allocated, over some reasonably foreseeable period, to outputs. This includes emissions not immediately associated with products or services (i.e., the equivalent of indirect costs), such as those due to overheads like CEO jet travel and headquarters administration, as well as joint and site-level emissions like shared infrastructure or utilities.
Watch a video on how emissions are allocated to outputs
Learn more about full allocation of emissions on page 27 of our Proto-Standard
Emissions from capital equipment proportionally allocated to the products it helps produce over its useful life. Capitalized emissions should be depreciated over the useful life of the property, plant, or equipment. Useful life is generally understood as the minimum of technological obsolescence and physical obsolescence. The simplest depreciation method is straight-line depreciation, but this assumes uniform production output over the asset’s useful life. If production is expected to change over time, then the depreciation schedule could causally allow for changing allocation of CO2 emissions over time.
Learn more about the treatment of capitalized emissions on page 25 of our Proto-Standard
The E-liability framework generally does not include downstream customer emissions in an entity’s carbon accounting statements. However, the expected emissions to be incurred in future periods for disposing of or decommissioning the entity’s presently deployed capital assets must be included. These end-of-life emissions are properly related to ongoing operations, and an organization should, where material, make reasonable, good-faith efforts to estimate these emissions and record them as E-liabilities. An allocated share of these end-of-life emissions should be assigned to periodic outputs using causal logic.
The E-liability framework does not include downstream emissions in its accounting for three reasons:
- Accounting for downstream emissions requires speculation about emissions quantities yet to occur by parties that are not necessarily known to the company
- A company has limited-to-no control over how its downstream customers use its products.
- A downstream company is already accountable for all its cradle-to-gate emissions generated through its purchasing and production decisions.
Multi-counting diffuses accountability. Theoretically, accountability of emissions should lie with the entities that have some control over them. However, we can’t realistically expect all individual end-consumers worldwide to maintain personal E-ledgers. This introduces a need for companies to assume some downstream accountability through disclosure (not accounting).
Explore the three guiding principles for downstream emissions disclosures
Read the paper on Principles and Content for Downstream Emissions Disclosures