Intervention vs. Inventory Accounting in Ag-Based Carbon Projects

Over 300 food and agriculture companies have pledged to reduce emissions across their value chains, incorporating millions of acres into regenerative agriculture programs. These goals are not just about optics—they’re a response to real risk. Climate-related supply disruption, price volatility, and evolving regulation are reshaping how food and ag businesses operate. To drive meaningful impact and reduce that risk, companies need strong programs—and that starts with understanding how we measure progress.

Measuring progress: inventory and intervention accounting

Inventory accounting measures the total greenhouse gas emissions across a company’s operations and supply chains. It’s used to report scope 1, 2, and 3 emissions and is critical for tracking progress toward net-zero goals.

Intervention accounting measures the emissions impact of specific projects or practice changes compared to a “business as usual” baseline. It’s the basis for generating carbon assets like offsets or insets, and it helps companies evaluate and quantify the impact of individual regenerative ag programs—even outside their immediate supply chains.

In short:

• Inventory accounting is about emissions ownership
• Intervention accounting is about project impact & credit generation

Both accounting methods matter. Here’s why:

Each method serves a different (but also complementary) purpose in program design and measurement. Inventory accounting enables companies to report progress on their own scope 3 emissions and demonstrate corporate climate performance, whereas intervention accounting helps companies show the results of their investments compared to business as usual. Intervention accounting captures the value of specific actions across a project area, even those that may not immediately show up in inventory reports.

While a company’s goals for a regen ag program may only require one or the other, there are cases to consider using them in tandem. Together, the two metrics can offer a more complete picture of a company’s efforts in emissions reduction and climate change mitigation, and their progress towards climate goals.

Program design for accounting methods

Whether you’re planning to use inventory, intervention accounting or both, your programs should be designed with your business goals from the start. That means:

• Defining what you want to measure: Scope 3 emissions footprinting, emissions reductions, carbon removals, broader landscape outcomes, or something else?
• Planning for data collection and monitoring: different accounting methods require different program criteria, such as grower eligibility and scope of data collection.
• Aligning incentives: Will farmers be rewarded for reductions or removals outcomes, or for implementing specific practice changes (pay-for-practice or pay-for-outcomes)? How will they be incentivized to adopt regenerative practices?

Ultimately, inventory and intervention accounting are tools for understanding your impact and then building the right program design. Once you understand what you’re trying to achieve — whether that’s emissions reductions, carbon credits, or landscape-level impact — you can select the method or methods that make the most sense for your business and your program design will follow.

Industry guidance, reporting trends, and getting your impact started

Over the last year we’ve seen a marked shift in interest toward using inventory accounting. The reasons for this are clear. With 2030 targets on the horizon, companies need a straightforward way to reflect the impact of supply chain investments in their corporate emissions reporting. Inventory accounting achieves this while also enabling multiple companies in a supply chain to report these impacts via supply shed accounting. 

Here’s an example: when companies source from a shared supply shed and co-invest in a regen ag project, they can use inventory accounting to allocate claims to each program funder based on their individual commodity sourcing. This approach can reduce program costs for all parties while creating landscape-level change. We’re seeing a lot of interest in this approach from partners and expect interest to grow due to the inherent benefits of scale through co-investment. This same reporting method can also be used by companies along the value chain, such as commodity suppliers and buyers, to report emissions based on sourced volumes at each stage of the supply chain (more on this in a future blog post).

Meanwhile, industry guidance is still incomplete whether or how companies can use intervention accounting-based credits in scope 3 inventory reporting. New SBTi Corporate Net Zero guidance indicates increased incentives for using market based mechanisms, which are quantified using intervention accounting, but lacks detail on how this should be done. Once finalized, this guidance could provide more options for companies to meet their objectives with either carbon credits or inventory reductions.

For now, our general recommendation is to use inventory accounting if you want to measure scope 3 reductions for company reporting or the reporting of your downstream customers. If you need to measure the impact of your investments relative to a business as usual approach, such as for internal budgeting and planning, then add intervention accounting quantification as well.

On the other hand, if you’re seeking to create credits to sell to a 3rd party via offsets or insets, then intervention accounting is the required approach for certification by carbon registries like Verra and SustainCert.

If all this sounds complicated, we get it. There’s plenty of swirl in the industry right now around carbon accounting (which is why we wrote this post!). During the last eight years, we’ve seen the industry shift from a focus on carbon credits to prioritizing scope 3 reductions. We expect that as industry guidance from GHGp and other global standards matures, things will continue to evolve.

Here’s the good news: while this can sound very high stakes, at Regrow we’ve worked with companies using both inventory and intervention accounting methods and also helped companies adapt their strategies and accounting methods over time as program objectives and industry guidance evolve. Once you understand what you’re trying to achieve — whether that’s emissions reductions, carbon credits,  or landscape-level impact — you can select the method or methods that make the most sense for your business and we can help you set up a strategy for the long term.

Have a question about selecting the right accounting method for your program? Reach out to a Regrow expert – we’d love to discuss your goals to drive impact in your supply chain.