Carbon Accounting is not an Easy Road - but it’s Worth it

How Danone, one of the world leaders in the agrifood sector, has tackled environmental accounting and find a new way to measure its environmental performance?

Environmental performance accounting systems have become key in corporate social responsibility (CSR) strategies and are the focus of attention in international business conferences. From the integrated reporting initiative led by the International Integrated Reporting Council to the Environmental P&L published by Kering in 2016, from the ‘True Value’ accounting methodology published by KMPG in 2014 to the Natural Capital Coalition standard released in 2016, the world is full of environmental accounting initiatives. On paper, setting up an environmental accounting program is attractive because it allows companies to account for their environmental performance – but is it that simple?


Companies wanting to measure their environmental performance have faced major challenges around the development of ever-refined standards, the relevant knowledge to spread in their teams, and the definition of their ‘scope of responsibility’. They have also faced challenges in designing and implementing their own measurement tools. Stakeholders – including rating agencies, investors, non-governmental organizations (NGOs), and governments – have all influenced the development of both reporting frameworks and, incidentally, performance measurement systems put in place by multinationals.

In this context, we have spent several years studying how one of the world leaders in the agri-food sector – Danone – has tackled environmental performance. Danone already had a strong CSR track record when it embarked on an ambitious environmental accounting program in 2007 to find a new way to measure its environmental performance.

In our research, we explore its strategic choices and show the different steps it has made in implementing a company-wide environmental accounting program.

We answer the following three questions:

  1. how did Danone build an entire carbon management system?
  2. what organizational structure did Danone choose for carbon accounting?
  3. which stakeholders did Danone involve in its project?


In this study, we highlight among other things, the reasons for Danone’s decision to measure its carbon emissions.

A number of indicators can be chosen as representative of a company’s environmental performance. A non-exhaustive list includes waste output, air pollution, water consumption (water pollutants released if applicable), biodiversity loss, ecological footprint, land and raw materials use, or any weighted combination of two or more indicators.

Several criteria can be also considered when deciding on the main indicator of environmental performance. Again, a non-exhaustive list includes comparability with other companies, ease of use, auditability, verifiability, relevance, rigor, replicability, consistency, and how material it is to the company’s stakeholders [i].

Carbon was considered by Danone as a good idea for several reasons: it is understood on a global scale, is already somehow “measurable” as well as under the spotlight, and it was also able to represent the whole chain (from agriculture to landfill/recycling). Other environmental areas do not possess such features. For example, water is more local or there is very little consensus on how best to represent the impact of organizations on biodiversity to date.

Tourism currently accounts for about eight percent of global greenhouse gas (GHG) emissions and significantly contributes to global warming, according to a recent study. In addition, annual growth of some four percent is anticipated over the next few years, outpacing most of the other sectors. In this context, tourism-related companies may want to address global warming and climate change and, as the adage of “what gets measured gets managed” states, set up a system to measure their GHG emissions as Danone did. Obviously, the road was full of obstacles.

The main challenge Danone had to face was choosing the “right” carbon accounting standard.

As Danone initially decided not to use the dominant standard (the GHG Protocol Corporate Standard), it was then difficult to communicate carbon performance results externally. They finally had to converge different accounting approaches as well as professionalize its environmental accounting system. We have seen the emergence of new roles, from carbon masters to carbon accountants, with Danone consolidating its carbon accounting through an ERP (enterprise resource planning) system.

The lessons learned from the Danone example (e.g. the human resources organizational structure built to develop carbon accounting and the roles played by direct and indirect stakeholders on how to design an environmental accounting system) can be useful both for tourism or hospitality firms that have already started to tackle GHG emissions, as well as for firms that want to start and learn from the experiences of others.

[i] See definitions in the IIRC, GRI, CDSB, and Natural Capital Coalition documents, as well as the SASB, FASB, and IASB.


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Dr Tiphaine Jérôme
About the author

Tiphaine Jérôme holds a PhD in financial accounting from HEC Paris and a Master’s degree in management science from the Sorbonne Graduate Business School and HEC Paris.

She is a former student of the Ecole Normale Supérieure (ENS) of Cachan. She holds the French agrégation in economics and management (ranked third nationwide). She has been a visiting student at the Erasmus University of Rotterdam and at the Hong Kong University of Science and Technology.

Her research covers CSR reporting and corporate governance. Her research has been published in Comptabilité – Contrôle – Audit, European Accounting Review, Journal of Business Ethics, and Social and Environmental Accountability Journal. Her dissertation received the best PhD award from the French accounting association.

She taught in institutions such as ENS Cachan, HEC Paris, and Paris-Sud University and has several years of experience in the French professional accounting education. She teaches courses in financial accounting and managerial accounting.

About the author

Dr. Delphine Gibassier is a senior research fellow at Lloyds Banking Group Centre for Responsible Business at Birmingham Business School. She was previously professor of management accounting and sustainability accounting at Toulouse Business School.