Driving Corporate Accountability: The Evolution of GHG Accounting
In the ever-pressing battle against climate change, the significance of greenhouse gas (GHG) accounting cannot be overstated.
Over the past few years, we’ve witnessed a remarkable surge in interest and adoption of GHG emissions disclosure initiatives among Regulators and Companies globally. This surge is not merely a trend, but a reflection of a growing commitment to sustainability, led by Regulators, and adopted by corporate alongside the carbon accountability.
At the forefront of this movement are regulatory developments, like the proposed rule by the US Securities and Exchange Commission (SEC) and the Corporate Sustainability Reporting Directive (CSRD) enacted by the European Union.
These regulations, alongside voluntary standards such as the International Sustainability Standards Board’s (ISSB) IFRS S2, are reshaping the landscape of corporate climate reporting.
What does GHG accounting entail?
At its core, GHG accounting involves standardised measurement and monitoring of GHG emissions, providing crucial insights into a company’s carbon footprint. From Scope 1 emissions (direct emissions from company-owned sources, i.e. facility) to Scope 3 emissions (indirect emissions from the value chain, i.e. suppliers or product couriers), companies are now held accountable for their entire emission profile.
The journey of GHG accounting traces back to pivotal moments like the signing of the Kyoto Protocol in 1997, which emphasised the need for global decarbonization.
In response to this need, the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) launched the GHG Protocol in 1998. This initiative laid the groundwork for standardized methods of GHG accounting, now recognized globally.
Today, the GHG Protocol’s “three scopes” framework serves as the cornerstone of corporate GHG accounting. This framework enables companies to comprehensively assess their climate impact, identify emission reduction opportunities, and engage stakeholders in meaningful dialogue.
The impact of GHG accounting extends far beyond regulatory compliance. It’s about empowering companies to make informed decisions, manage risks, and contribute to global emission reduction efforts.
At WRI, they’re committed to advancing GHG accounting standards through ongoing revisions to ensure that the companies align with ambitious emission reduction targets.
As we navigate the complexities of climate change, the importance of corporate accountability cannot be overstated.
GHG accounting represents a critical tool in our collective arsenal to combat climate change and build a more sustainable future for generations to come.
At BeChained, we are committed to reduce energy and resource consumption, within the #carboninsetting (Scope 1) and we certify the #carbonfootprint from direct sources at facilities. We then foster transparency through a #blockchain-based secure infrastructure.
Finally, we promote #demandflexibility to shave peaks along the #electricgrid and boost a more secure and resilient infrastructure, able to balance a growing adoption of #renewableresources (energy system decarbonisation).
