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 are key

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 complementary) purpose in program design. 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. Intervention accounting captures the value of specific actions across a project area, even those that may not immediately show up in inventory reports.

Together, the two metrics 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?

In practice, the accounting method you choose can shape the scope and design of your program. Let’s look at an example of this in the context of inventory programs and crop rotation systems:

If a company is using inventory accounting to track only a single commodity in a crop rotation (such as corn), then emissions reductions may only be credited during “corn years” according to GHGp guidance. This means that farmers may only be incentivized to implement regenerative practices in those years, even though practices like cover cropping, no-till, or nutrient management are most effective when applied consistently across the entire rotation and indeed require ongoing management to be claimable.

This approach can inadvertently fragment impact, reduce long-term soil health benefits, and make outcomes like carbon sequestration harder to achieve—since these outcomes depend on continuity over time, not isolated interventions. Alternatively, if a single company provides incentives for a grower to adopt regenerative practices during both corn years and non-corn years while only sourcing corn, inventory accounting can result in “stranded assets” via emissions reductions or removals and for those non-corn years. 

Intervention accounting and supply chain partnerships offer alternative approaches:

• Pairing inventory accounting with intervention accounting can allow the company to generate impact credits for market based mechanisms such as insets or offsets that can be used to drive investments and increase ROI of the program. This paired approach would be to use inventory accounting to claim what can be sourced by a claiming company, and to use intervention accounting for the remainder.
• Partnering with other companies that source the other crops in a crop rotation system enables companies to 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 supporting sustained practice adoption and creating landscape-level change.
• Intervention accounting is also useful for validating program impact for budgeting and stakeholder alignment. Additionally, new SBTi Corporate Net Zero guidance indicates increased incentives for using market based mechanisms, which are quantified using intervention accounting.

Start with goals, then choose the right accounting method

Companies across the agrifood value chain are under pressure to meet decarbonization targets while keeping pace with evolving regulations and stakeholder expectations. That can make accounting feel like a high-stakes decision. However, the accounting method should follow your program goals—not the other way around.

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.

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 evolve. What matters most is establishing your strategy at the outset, so you can design your program to deliver results.

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.

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