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Our experts weigh in on recommended updates to the global greenhouse gas accounting standard.

by: Garrett Keraga | March 20, 2023

Boyertown, Pennsylvania (March 20, 2023) – In 2023, the Greenhouse Gas Protocol (GHG Protocol) invited stakeholders to recommend updates to its widely-used standards and guidance for measuring greenhouse gas inventories. This presents a rare opportunity to help shape the way that companies report on emissions, track them over time, and use market-based mechanisms to support global decarbonization efforts. The ClimeCo team gathered leaders from around the company with expertise in measuring inventories, developing environmental commodities, and helping companies lower their emissions. We’ve crafted a response to help push the industry forward constructively and mindfully.

In the survey for the Corporate Accounting and Reporting Standard, we indicated a high level of satisfaction with the existing material and provided a range of minor tweaks to improve fidelity. This included suggestions like improved guidance on emission factor databases and leased asset accounting, improved accounting procedures for companies or portfolio managers with high levels of inorganic growth, and a clear recommendation on a baseline recalculation threshold.

Our responses for Scope 2 and Scope 3 similarly indicated satisfaction with the current guidance but suggested several more areas of improvement. Within Scope 2, we requested clearer guidance around renewable energy certificate (REC) boundaries and improved residual mix emission factor availability globally. We did not see a current need for revisions to the REC market that incorporate proof of total change in low-carbon supply. Our Scope 3 suggestions included creation of a remote work emissions category: consistent allocation of upstream versus downstream emissions, additional industry specific guidance for several categories, and guidance around market-based mechanisms within Scope 3.

Our experts had numerous suggestions for the future of market-based accounting, including expanding market-based accounting into Scope 1 and Scope 3 through inset credits, mass-balance certification, and book and claim certificates. We advised the GHG Protocol to establish systems that use the same principles as the current market-based Scope 2 reporting. Our team believes the voluntary market will continue incentivizing fast-paced, cost-effective progress toward net-zero, regardless of physical limitations. The graphic below explains how this system might work with a book and claim approach for a shipping company.

About ClimeCo

ClimeCo is a respected global advisor, transaction facilitator, trader, and developer of environmental commodity market products and related solutions. We specialize in voluntary carbon, regulated carbon, renewable energy credits, plastics credits, and regional criteria pollutant trading programs. Complimenting these programs is a team of professionals skilled in providing sustainability program management solutions and developing and financing of GHG abatement and mitigation systems.

For more information or to discuss how ClimeCo can drive value for your organization, contact us at +1 484.415.0501, info@climeco.com, or through our website climeco.com. Be sure to follow us on LinkedIn, Facebook, Instagram, and Twitter using our handle, @ClimeCo.