International carbon accounting standards exist to establish consistent and universally accepted methodologies for measuring, reporting, and verifying greenhouse gas emissions across countries and organizations. These standards ensure accuracy, comparability, and transparency in carbon footprint assessments, enabling effective global cooperation in addressing climate change.
By providing a common framework, these standards facilitate the development of international climate policies, and help businesses comply with regulatory requirements. Some of the most vital ones that apply to the most businesses include the Greenhouse Gas Protocol, ISO 14064, Partnership for Carbon Accounting Financials (PCAF) and PAS 2060.
The GHG Protocol was established in 1998 as a collaboration between the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). It became the most widely used international accounting tool for measuring and managing greenhouse gas emissions due to its credibility, standardization and ongoing improvements.
It also has a degree of flexibility that many reporting standards don’t have, in the sense that it’s applicable to businesses of any size - whether it's a large multinational corporation, a small local business, a government agency, or a nonprofit organization.
The GHG defines emissions against three different scopes, which comprise the de facto language for carbon accounting:
ISO 14064 was created in 2006 by the International Organization for Standardization (ISO) and is based on the GHG protocol. It is part of the ISO 14000 series of standards that address various aspects of environmental management and sustainability - the three parts are:
ISO 14064 applies to any entity that aims to measure, report, and manage greenhouse gas (GHG) emissions that already use ISO principles across their organization. ISO standards are periodically reviewed and updated to reflect advancements in technology, best practices, and changes in the global context.
The Partnership for Carbon Accounting Financials (PCAF) is a global initiative that focuses on standardizing carbon accounting for the financial sector. PCAF is particularly concerned with financed emissions - also known as financed greenhouse gas emissions. These refer to the carbon emissions produced by companies or projects that receive financial support from:
PCAF uses the principles and methodologies outlined in Category 15 (Investments) of the GHG Protocol as a foundation to develop its standardized carbon accounting framework. It enables financial institutions to assess climate-related risks in line with the TCFD, set science-based targets based on SBTi, report emissions to stakeholders, and make more informed decisions on climate strategies and actions.
PAS 2060 was developed by the British Standards Institution (BSI), and provides a framework for achieving and demonstrating carbon neutrality. "PAS" stands for "Publicly Available Specification," and it is a document that sets out specific requirements, recommendations, or guidelines for a particular process or product. It does so by four stages:
PAS 2060 provides organizations with a standardized approach to becoming carbon neutral and offers a way for them to communicate their commitment to addressing climate change and reducing their environmental impact. It can be used by businesses, governments, and other entities seeking to achieve carbon neutrality and align with global climate goals.
With so many international carbon accounting standards, it can be difficult to know where to start. Due to the nature of the goals and general direction of the standards discussed above, it can also be difficult to tell them apart from one another as there is a degree of interconnectedness between them. For example:
Knowing which carbon accounting standard to adhere to depends on various factors, including your organization's size, industry, location, reporting goals, and stakeholder expectations. There are a number of benefits to ensuring your organization is adhering to these protocols regardless of which is most relevant to you.
These standards provide a systematic approach to measure and report greenhouse gas emissions, identifying emission sources and hotspots accurately - after which, an organization has a better baseline to work from in establishing meaningful carbon reduction targets. The data-driven insights also help to facilitate the prioritization of emission reduction initiatives, optimizing resource allocation and fostering a culture of sustainability throughout the organization.
By quantifying their carbon footprint, organizations gain a comprehensive understanding of their environmental impact - particularly in comparison to how other similar organizations are stacking up, or even direct competitors. With standardized methodologies such as those outlined within carbon accounting standards, companies can benchmark against industry peers and set achievable reduction targets.
Adhering to standardized carbon accounting methodologies ensures accurate and transparent reporting of greenhouse gas emissions, which enhances stakeholders' trust in the reported data and the organization's commitment to carbon reduction. On the whole, adhering to carbon accounting standards not only demonstrates an organization's commitment to carbon reduction but also strengthens its reputation, helps attract environmentally-conscious investors and customers, and positions it as a responsible and forward-thinking entity.
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