Going Beyond The Corporate Standard
How to get the most out of corporate-level emissions data
In my last post, I explained how the Greenhouse Gas Protocol (GHG-P) created the Corporate Standard to help corporations navigate accounting and reporting scope one and two emissions. To support those engaging in this process, I created said blog to summarize the guidance document and the GHG-P’s three-day training course. In this post, I will continue the discussion and offer additional support so that there’s a higher return on the report.
In the previous blog post, I explained that the Corporate Standard allows businesses to create an emissions data report that voluntarily informs stakeholders of the business’s current emissions, this report could also be used to catalyze future corporate mitigation strategies. Beyond voluntary reporting, the Corporate Standard (which I will refer to as The Standard) can also guide reporting strategies for compliance needs.
While The Standard is a step in the right direction, there is work that corporations must do beyond The Standard to maximize the relevance, completeness, transparency, and accuracy of emissions reports for internal and external decision-making purposes. Outside of The Standard, corporations should consider scope three emissions, investigate and apply mitigation strategies, and seek outside verification.
Scope Three Emissions
Scope three emissions include greenhouse gasses released during the early and end stages of production. Some examples include emissions generated by purchased goods and services, transportation and distribution, and customer use and disposal. The GHG-P provides guidance for scope three processes in the Corporate Value Chain (Scope 3) Standard. See the image below for a clear representation of the available corporate guidance documents and the emissions considered in each.
While this data is not a requirement for the Corporate Standard, it is best to include scope three emissions data because it improves the legitimacy and application of the report. Without scope three, a corporate discloses only part of the emissions data. By including scope three, the data better reflects the realities of production.
Including this data also informs internal emission reductions strategies. This brings me to my next point. Now that the business is fully aware of its emissions, how could the corporation apply this information?
Emission Reduction Goals
To answer my own question, the corporation can use this data to inspire emissions reduction strategies. With a greater understanding of the emissions that occur during the entire production process, the corporation can discover and adopt climate-smart interventions.
Internally, understanding the boundaries and emissions deriving from different sources can influence climate-smart production strategies as it unveils opportunities for improvement. Emission reduction strategies can take shape at any stage of production. For instance, climate-smart agriculture is a process that promotes carbon-sequestering activities. Applying these activities can mitigate early-stage scope three emissions, insetting, or offset other corporate emissions if they’re bought in carbon markets.
At Carbon A List, we investigate agricultural initiatives that procure carbon assets for sale in carbon markets. But these are just one of the many strategies available. Check out registries like the Gold Standard, Verra, Climate Action Reserve, or Plan Vivo to learn about additional initiatives that create positive environmental, social, and financial outcomes. Registries like these certify sustainable project outcomes and sell credits for purchase in their respected marketplaces.
Pursuing emission reduction strategies also satisfies stakeholder concerns because they not only care about emissions data, they also care about emissions reduction efforts.
Earlier this month, I took part in the GreenBiz Transparency Matters: The Story of ESG Data webinar to learn how and why financial investors care about sustainability reporting and commitments. In summary, investors care about this information because climate change creates risks. By considering emissions data and other climate-related reports, investors can better understand how the corporation promotes outcomes that create social, environmental, and financial co-benefits.
Consumers are also highly concerned with this data. Consumers want to support businesses that adopt better practices and produce beneficial outcomes. The World Wildlife Fund (WFF) commissioned an economic report to show how consumers’ are financially communicating their concerns.
The Corporate Standard does not discuss these strategies. But as a corporate investing time and effort to draft a report, wouldn’t it be better to use this data as much as possible?
There are other abatements strategies to choose from as well. For information about the strategies encouraged by national and international entities, visit sites like the U.S. Environmental Protection Agency (US EPA) or the United Nations Framework Convention on Climate Change (UNFCC).
And as the business explores these pathways, it’s important to confirm that the reduction strategies create real, additional, and verifiable outcomes. Investing in flawed interventions can degrade climate-smart changes.
Verified outcomes should not only apply to emission reduction strategies. Verification can also increase the legitimacy of the approaches used to account and report emissions data.
The Corporate Standard is voluntary, so it doesn’t require this step. However, to ensure that the data is collected and reported with integrity, third-party verification can prove that the report is reliable.
With reliable data and third-party verification, the corporation can better inform stakeholders about the quality of the data and allow them to make more knowledgeable decisions.
The verification process makes it possible for corporations to better understand the requirements and expectations for the report, the true nature of their emissions, and adequately scale intervention strategies.
The Greenhouse Gas Protocol offers verification services with the “Built on the GHG Protocol Mark”, which indicates to others that the report has satisfied the GHG-P’s criteria. Additionally, those that complete the GHG-P’s verification are listed on the website along with others that have completed the same process. This can also increase the visibility of the report and its authenticity.
Accounting and reporting emissions data can be complicated, but the Greenhouse Gas Protocol does a great job demystifying the process so that businesses have the opportunity to quantify their emissions, inform stakeholders, and motivate interventions that tackle corporate emissions. Keep in mind that one entity’s scope oneemissions might be another’s scope three.
The Corporate Standard is a voluntary strategy that is primarily geared towards scope one and scope two emissions, but there are opportunities to broaden the scope to include scope three and effectively pursue additional techniques that encourage transparency and climate-smart action.
Some of the best ways to learn about these opportunities are to participate in webinars and discuss with others making similar commitments.
It is also important to know that while these strategies and regulations evolve, investing in these interventions will generate positive outcomes for both the corporation and the climate.