Carbon Accounting as an Anti-Greenwashing Mechanism for Environmental Accountability and ESG Credibility

Abstract

The rapid expansion of Environmental, Social, and Governance (ESG) reporting has increased corporate transparency regarding sustainability performance. However, concerns regarding the credibility of ESG disclosures remain significant due to the prevalence of greenwashing, where organizations communicate environmental responsibility without corresponding substantive actions. This study aims to examine the role of carbon accounting as an anti-greenwashing mechanism that strengthens environmental accountability and enhances ESG credibility in emerging markets. Using a Systematic Literature Review (SLR) approach, the study synthesizes recent literature on carbon accounting, environmental accountability, sustainability reporting, and greenwashing. The findings indicate that carbon accounting provides measurable, verifiable, and auditable environmental information that reduces information asymmetry, improves disclosure transparency, and strengthens the alignment between sustainability commitments and actual environmental performance. Furthermore, carbon accounting enhances environmental accountability by supporting systematic measurement, monitoring, reporting, and verification of greenhouse gas emissions, thereby limiting opportunities for symbolic ESG disclosure and greenwashing practices. The study proposes an integrated conceptual framework in which institutional pressures encourage the adoption of carbon accounting, leading to improved transparency, stronger environmental accountability, reduced greenwashing, and enhanced ESG credibility. This study contributes to sustainability accounting literature by positioning carbon accounting not merely as a reporting tool but as a governance mechanism that supports substantive accountability, organizational legitimacy, and stakeholder trust.

Keywords:  Carbon Accounting; Greenwashing; Environmental Accountability; ESG Credibility; Sustainability Reporting; Sustainability Governance