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Keeping you in-the-know on environmental, social and governance developments

Last week, Heather Clancy of GreenBiz reported that efforts are underway to update the GHG Protocol – the basis of almost all GHG emissions reporting presently. Heather writes:

“It’s a poorly kept secret that most GHG footprint declarations we all read in corporate social responsibility (CSR), environmental or sustainability reports are a complex mashup of calculations based on procurement information, estimates reported by corporate divisions and supply chain partners, and averages that have been worked up for various industry sectors.

And when it comes to Scope 3 data, the guesstimating about a product’s carbon life cycle is even more complicated, according to industry experts….

The protocol, managed by WBCSD and the World Resources Institute (WRI) is a foundational part of the Science Based Targets initiative (SBTi) — but it hasn’t been revised significantly in more than a dozen years. In recent months, corporate sustainability professionals have been pushing for an overhaul for many reasons, including the mandatory reporting requirements proposed by the U.S. Securities and Exchange Commission.” 

If you have never used the Protocol or attempted to verify/audit its results, then this may be news to you. But it is true that some of the data is generalized and uses third party averages or estimates. Even direct emissions from manufacturing/process equipment are calculated using emissions factors similar to US EPA AP-42 air emissions for certain pollutants, processes, equipments and industries where direct monitoring is not required or used.

Yet unlike AP-42, the Protocol’s importance goes beyond just disclosure of emissions – results from using the Protocol also form the basis of emissions reductions targets that then drive company actions. The article points out comments made by Anna Stanley-Radière, Director of Climate Transparency at the World Business Council on Sustainable Development (WBCSD), during a session at VERGE Net Zero 22:

“Companies are using secondary data, industry averages, proxy data to account for their emissions, to then take targeted reduction measures. Yes, it’s really important that progress is made, and we definitely need to see this as a journey where bit by bit, companies get better. But we need to quickly get to that primary data in order to be able to completely understand where those hotspots are and where we can take much more targeted action.”

Some GHG accounting software companies are taking things into their own hands to provide a “more accurate view of electricity consumption and carbon intensity on a far more frequent basis.” But they are limited in what they can do for several reasons, including the fact that they must stay within the Protocol’s guardrails because it is the global standard at the moment. 

One group pushing for updates is the Emissions First partnership, which formed last December.

“The group has published a set of principles they’re hoping to see embraced within the forthcoming amendments to GHG accounting. Their ideas support a primary objective of moving away from calculations that emphasize matching megawatt-hour for renewable energy contracts and that instead prioritize corporation action that actually decarbonizes the grid, including energy efficiency projects or the addition of clean power in regions where it isn’t plentiful.”

Comments on the Protocol update are being accepted until February 28. This is an excellent opportunity to put in your two cents’ worth.

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The Editor

Lawrence Heim has been practicing in the field of ESG management for almost 40 years. He began his career as a legal assistant in the Environmental Practice of Vinson & Elkins working for a partner who is nationally recognized and an adjunct professor of environmental law at the University of Texas Law School. He moved into technical environmental consulting with ENSR Consulting & Engineering at the height of environmental regulatory development, working across a range of disciplines. He was one… View Profile