To save you reading the 58 page document, we’ve summarised some of the key survey findings below!
General Feedback on Reporting Principles
The current reporting principles outlined in the Corporate Standard are:
- Relevance
- Completeness
- Consistency
- Transparency
- Accuracy
Stakeholders proposed updates to the GHG Protocol Corporate Standard's accounting and reporting principles. Suggestions included balancing comparability and tracking emissions over time, prioritising high-quality data, reconsidering the principle of "relevance," introducing materiality thresholds, and incorporating core principles from financial accounting standards. Additionally, stakeholders recommended including the principle of conservativeness to ensure cautious accounting practices.
Organisational Boundaries
The Corporate Standard currently requires companies to determine their organisational emissions boundary via the operational control, financial control or equity share approach.
The survey findings reveal a preference among organisations for the operational control approach in defining their boundaries. However, opinions were split on whether to maintain or revise these standards. Proponents of the status quo stressed the need for flexibility and interoperability, while others suggest revisiting organisational boundary approaches, proposing options like a single consolidation approach, or aligning with financial accounting standards. Additional guidance was also a recurring request, particularly regarding leased asset classification and consolidation approaches. Stakeholders emphasised the importance of balancing increased comparability with organisational flexibility and minimising burdens on businesses.
Operational Boundaries
After an organisation sets its organisational boundaries, it then sets its operational boundaries. This involves identifying emissions sources associated with its operations, categorising them as Scope 1, 2 or 3 emissions, and choosing the emissions to be included in the GHG inventory. While reporting on Scopes 1 and 2 is mandatory, Scope 3 reporting is optional under the Corporate Standard but obligatory under the Scope 3 Standard.
In essence, stakeholders highlighted the need for clearer guidelines, increased alignment across standards, and more specific guidance tailored to different sectors and use cases to facilitate consistent and comprehensive GHG reporting.
Feedback on maintaining the current approach to operational boundaries emphasises flexibility, minimising organisational burdens, and avoiding the establishment of new base year emissions. However, suggestions for revisiting boundaries include aligning standards and guidance, providing clarity on inventory completeness, and potentially requiring Scope 3 emissions reporting under the Corporate Standard.
Respondents also request additional operational boundary considerations such as addressing avoided emissions and carbon removals, defining boundaries for emerging decarbonization technologies, and providing guidance on market-based accounting approaches.
Moreover, there's a call for sector and use case-specific guidance, particularly for sectors like financial services, agriculture, forestry, oil and gas, and electric vehicles.
Tracking Emissions Over Time
The Corporate Standard outlines requirements for tracking emissions over time, including setting a base year, recalculating base year emissions, and defining significance thresholds.
Overall, stakeholders emphasised the need for clearer guidance, flexibility, and alignment with evolving standards to effectively track emissions over time. This feedback touched on several key themes.
- Alignment with Target-Setting Frameworks: Many respondents suggested better alignment with frameworks like SBTi, including base year selection and materiality thresholds. Some urged for close collaboration between the Corporate Standard and SBTi.
- Base Year Selection: Feedback included recommendations to revise the Corporate Standard's base year guidance, suggesting 2015 as a base year for consistency with the Paris Agreement. Respondents also highlighted challenges with using 2020 or 2021 due to anomalies caused by the COVID-19 pandemic.
- Significance Threshold and Materiality: There were suggestions to remove ambiguity around establishing significance thresholds and disclose more specific requirements. Some recommended aligning with SBTi's 5% threshold.
- Base Year Recalculation: Feedback included suggestions to clarify the circumstances triggering base year recalculations, aligning with financial reporting principles, and providing more specific disclosure requirements.
- Additional or Alternative Methods: Respondents proposed greater flexibility in tracking emissions over time, incorporating performance-based reporting, and addressing challenges with estimating base year emissions for acquired assets.
- Requests for Additional Guidance: Stakeholders requested more guidance on various aspects, including base year selection, recalculations, scope considerations, emissions factor changes, and subsidiaries' emissions tracking.
Verification and Assurance
The Corporate Standard does not currently mandate verification or assurance but offers guidance in Chapter 10.
Some respondents supported maintaining the current guidance, citing concerns about additional burdens on organisations and alignment with existing regulatory requirements.
Those who proposed revisiting the existing guidance emphasised the need for clearer guidance and advocated for the benefits of enhanced transparency and confidence in reported data. Suggestions for verification/assurance requirements include varying scopes, frequency, and applicability based on organisation size or sector. Respondents suggested updates to provide clearer definitions, distinctions, and specifications within the guidance. They also recommended reconsidering verification parameters for scope 3 emissions and updating guidance on historical data reassurance.
In general stakeholders seek more guidance on appropriate verification standards, alignment with regulatory requirements, qualifications for third-party verifiers, and preparation for verification or assurance processes.
Data and Reporting
Feedback on data and reporting requirements generally fits in to the following themes:
- Data Quality and Uncertainty: Stakeholders request additional requirements and guidance on data quality, including specifying source data types, hierarchy of data quality, and disclosure of uncertainty estimates.
- Emission Factors: Requests include maintaining a consolidated database of emission factors, guidance on evaluating and updating emission factors, and disclosure requirements for emission factors used.
- GWP Values: Stakeholders seek clarification on which IPCC Assessment Report to use for GWP values, consistency between Corporate and Scope 3 Standards, and guidance on using GWPs for non-covered gases.
- Calculation Methodology: Suggestions include developing specific guidance for scope 1 emissions and fugitive emissions, incorporating estimation methodology guidance, and updating methodologies for new technologies and alternative fuels.
- Reporting Requirements: Stakeholders advocate for more prescriptive reporting requirements, including expanded disclosure of methodologies, significant estimates, and exclusions, as well as clarifying requirements for GHG emissions data presentation.
- New Tools and Resources: Requests include comprehensive databases for emission factors and GWPs, electronic reporting systems, industry benchmarks, updated Scope 3 estimator tools, and guidance on regulatory reporting and emission reduction progress.
GHG Protocol Governance Structure and Standard Development / Update Process
Some respondents recommended the following governance elements for the GHG Protocol to consider:
- An oversight board comprised of key stakeholders
- A standard setting board with relevant experience (e.g., engineering, sustainability reporting, standard setting)
- Formal due process over issuance of new standards
- Post implementation review
- Process for continuous updates and maintenance
- Competent staff from all relevant disciplines in sufficient number to achieve the objectives of the organisation
- Independent source of funding
Other feedback revolved around the need for a mechanism for continuous updates from the GHG Protocol to reflect new and emerging areas, including:
- Continuous updates to reflect the voluntary and mandatory GHG emissions reporting landscape, or other changes in the regulatory environment
- Continuous updates to reflect changes in GHGs covered by the UNFCCC, emission factor sources, GWP values, and the latest developments in climate science
- Continuous updates to reflect new and emerging technologies
- Continuous updates to reflect the latest terminology and definitions
- Continuous updates to reflect current GHG target setting best practices
- Continuous updates to case studies and related examples
What’s Next?
This summary report will support the development of specific work plans for Corporate Standard updates and related GHG Protocol standards, to be developed through Technical Working Groups and other committees as part of the standards development process.
GHG Protocol is now working to conduct a review of the applications and anticipates convening Technical Working Groups in mid-2024.
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