AI Adoption and Strategic Carbon Emissions Disclosure

Investigator:

• Han Yan, Accounting and Information Systems Division

Background

As companies adopt artificial intelligence to enhance productivity, they also face rising electricity demand associated with AI infrastructure. At the same time, firms are under growing pressure to demonstrate credible progress toward net-zero goals. Concerns are emerging that companies may strategically leverage carbon accounting rules—particularly market-based Scope 2 frameworks—to reduce reported emissions using low-cost renewable energy certificates rather than reducing actual fossil-based electricity use. This dynamic has raised questions about whether AI adoption is accompanied by genuine decarbonization or more sophisticated emissions reporting tactics.

Research Objectives

This project investigates whether corporate AI adoption leads firms to exploit market-based Scope 2 accounting rules to artificially lower reported emissions. It will examine how AI investments correlate with renewable energy certificate purchases, physical electricity sourcing, and changes in reported versus real emissions. The findings will clarify whether current disclosure standards inadvertently incentivize “emissions gaming” and will inform policy reforms that promote authentic decarbonization.