GHG reporting accounting and management

25th July 2011

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In the second of IEMA's e-Briefings Nigel Leehane details the institute's latest guidance on schemes and standards for greenhouse gas (GHG) reporting, accounting and management

The need to take action to minimise the impacts of climate change has resulted in the development and publication of a growing number of schemes and standards for accounting, reporting, and management of greenhouse gas emissions
While the IEMA 2010 Special Report – GHG Management and Reporting confirmed that IEMA members recognised the need for action and supported mandatory GHG reporting at least for larger organisations, it also identified members’ concerns regarding the number of GHG accounting and reporting schemes and standards and the perceived lack of alignment between them.

This briefing note provides an overview of the many existing and emerging schemes and standards and their relationships; and illustrates how they are relevant to environment and sustainability practitioners. It also explains how practitioners can plan to conform to the requirements of more than one, by utilising an environmental management system to promote the efficient collection and use of GHG emissions data.

Definition of GHG schemes and standards

Scope and objectives of GHG schemes and standards

The majority of GHG schemes and standards set out to demonstrate the level of performance in relation to minimising GHG emissions. Many focus on the reporting of emissions in a consistent and reliable manner, to facilitate the comparison of performance over time or between entities (benchmarking). Some also require the setting of performance improvement targets and measuring performance against them.

The scope of application of the various statutory and voluntary schemes and standards is wide-ranging, from organisational-level reporting of emissions to accounting for individual goods and services, and including emissions reduction projects for generating carbon credits for the offsetting market. Some of these have very different approaches to the collection and application of data, involving different sources of data, the use of different tools for estimation or calculation and varying levels of requirements for verification and for the competence of individuals involved.

One key difference is the types of greenhouse gases covered, which may range from only carbon dioxide to all six Kyoto gases, and in some cases with the option to include additional, non- Kyoto GHGs. Another is sources of the emissions; are they emitted directly by the organisation itself, or are they emitted indirectly on its behalf by others?

Common themes and principles

Some standards are developed intentionally to be “scheme neutral”; that is, the methods or approaches they establish can be applied to any GHG scheme as a framework for effective monitoring and control regardless of detailed scheme rules for calculation, accuracy etc. There is also considerable commonality between standards regarding the principles of GHG reporting, establishing organisational boundaries for reporting and dealing with direct and indirect emissions.

The following five principles for reporting are widely recognised:

  • relevance - the report serves the decision-making needs of both internal and external users and the emissions/sources selected are relevant and representative of normal operations;
  • completeness - the report includes all GHG emission sources within the chosen boundary
  • consistency - the calculation, etc, methods used allow meaningful comparison over time
  • transparency - including for example disclosure of assumptions, potential inaccuracies, accounting data flow, etc. and
  • accuracy - no systematic under- or over-estimation, and reduction of uncertainty in measurement etc.

These principles should be considered in the planning of an emissions accounting process to enable intended users of any report to make decisions with reasonable confidence.

There is also consensus that organisations should be allowed to select the method used to determine their reporting boundary, on the basis of either the extent of activities over which they exercise control (taking ownership of 100% of emissions associated with operations within their control only) or in which they have an equity share (taking ownership of an equivalent proportion of the emissions from the various entities in which they are shareholders).

Similarly, the concepts of direct and indirect emissions are well developed and generally consistent.

Direct emissions are emissions of GHGs (combustion gases from fossil fuels, processes emissions, fugitive releases, etc) within the organisation’s control boundary. Indirect emissions are those occurring outside the direct control of the organisation, for example from the generation of power that the organisation uses, employee commuting, business travel by public transport, emissions from suppliers’ operations or from customers use of products.

In some standards direct emissions are referred to as “Scope 1” emissions, and the types of indirect emissions listed above (except electricity) as “Scope 3”. Emissions from the generation of electricity are defined, from the perspective of the user of electricity delivered by the distribution system, as “Scope 2” indirect emissions.

The reason for separating the two classes of indirect sources is that there is a close correlation between an organisation’s consumption of electricity and the emission from power stations of carbon dioxide from the combustion of fossil fuel. So, although a company does not directly release GHGs by the consumption of electricity, it is placing a demand on the generators, who do.

Generally, organisations are expected to include Scope 1 and 2 emissions in organisational footprints, but the inclusion of Scope 3 emissions is voluntary, although including significant Scope 3 emissions increasingly is recognised as good practice.

Categories of GHG schemes and standards

The principal categories of schemes and standards are:

  • organisation-wide GHG emissions accounting, management and reporting including a range of international and national initiatives for developing processes for determination of an organisation-wide footprint;
  • installation (site) GHG emissions reporting and management, typically a regulatory requirement for medium to large scale emitters to declare emissions and comply with emissions caps or reduction targets;
  • product or service carbon foot printing, involving the quantification of emissions associated with the raw materials supplied, production, use and disposal of a product or the delivery of a service, based on life cycle assessment principles. In addition to carbon reduction, this data may also help to inform interested parties (e.g. for data provision within supply chains or the application of an emissions label);
  • development emissions assessment, calculating the emissions from a construction or development project, including during the construction, operational and decommissioning stages;
  • offset generation, where a project is established to eliminate reduce GHG emissions, thereby generating carbon credits (avoided emissions compared to business as usual);
  • verification, of organisational, product, service or development footprints or of offsets;
  • communications and claims; and
  • others related to emissions management, for example energy management systems.

Each of these categories has its own schemes and standards, some well known and widely used and others in development.

There is considerable overlap between some of them. For example, emissions from individual installations or development projects are part of an organisation’s overall footprint, and can be used directly in its calculation.

Similarly, in calculating emissions associated with a product or service, an organisation will derive data that can be used in organisational reporting. So, in order to develop an efficient and appropriate data collection and management process, it is important that an organisation has clear objectives for its GHG emissions accounting, management and reporting.

Organisational footprinting

The Greenhouse Gas Protocol initiative is a multi-stakeholder partnership, convened by the World Resources Institute and the World Business Council for Sustainable Development.

In 2001, it published The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (Corporate Standard), widely recognised as the first international standard for emissions accounting. In addition to establishing reporting principles, the protocol includes substantial guidance for reporters; and the GHG Protocol website provides a number of calculation tools.

In order to comply with the GHG Protocol Corporate Standard, organisational footprints must include Scope 1 and 2 emissions. The inclusion of Scope 3 emissions is voluntary, and the GHG Protocol is developing additional guidance to help with this potentially difficult area of emissions reporting.

The international standard ISO14064-1 Specification with guidance at the organizational level for use gas emissions mirrors much of the content of the GHG Protocol Corporate Standard, but in a more concise form, to provide the criteria against which organisations’ reporting processes and control systems can be audited (but does not include precise calculation methodologies, etc). Additionally, further guidance in organisational carbon footprinting will be provided by ISO 14069.

In the UK, Defra and DECC published in 2009 Guidance on how to measure and report your greenhouse gas emissions, based on the GHG Protocol Corporate Standard. This is more ‘specific’ guidance for UK based organisations. It is accompanied by an emissions calculator tool, which provides a means of quantifying a wide range of direct and indirect emissions, using information often readily available within organisations.

The Climate Change Act 2008 requires the UK government to introduce regulations for mandatory GHG reporting by businesses by April 2012 or alternatively to report to Parliament on why they will not be introduced. IEMA’s membership survey confirmed that there was widespread support for such a move, but (at time of writing) the government has made no decision yet for a generic requirement.

However, it has introduced the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme, which requires over 2,500 organisations to account for their relevant energy related carbon dioxide emissions.

This scheme has specific data collection and reporting rules including proposed ‘league tables’. At time of writing Government is undertaking a simplification review on the scheme.

For organisations wanting to demonstrate their commitment to GHG emissions reduction, the Carbon Trust Standard is a third party verified mechanism approved by Government for public disclosure of emissions and reduction performance. The Environment Agency has approved a number of equivalent schemes offered by other verifiers.

Similar developments are occurring internationally; in North America, The Climate Registry provides a voluntary mechanism for organisational reporting, and includes a requirement for external verification, and many states, led by California, have established mandatory or voluntary accounting and reporting rules.

Canadian States participate in the Western Climate Initiative and some have mandatory reporting. In South Korea a mandatory reporting requirement for all Kyoto gases is being rolled out across the whole economy in 2011.

The Carbon Disclosure Project (CDP) is an independent not-for-profit organisation representing institutional investors, which invites several thousand of the world’s largest companies to submit annual emissions data, using the Greenhouse Gas Protocol.

The CDP questionnaire also sets out to establish approaches to governance and details of GHG reduction initiatives and includes encouragement for reported data to be independently verified.

Overview of organisational accounting and reporting schemes and standards
GHG Protocol: A corporate accounting and reporting standard Internationally-recognised and incorporating emissions factors suitable for specific countries and international settings
ISO 14064 Part 1: Greenhouse gases – Part 1: Specification for the quantification, monitoring and reporting of organisation emissions and removals Internationally recognised. Provides the criteria for verification auditing of organisational footprints
DECC/Defra Guidance on how to measure and report your greenhouse gas emissions (2009) Builds on GHG Protocol and ISO14064. UK-focused, including extensive guidance and a calculation tool incorporating UK-specific emission factors (some applicable internationally). Includes a supply chain estimation mechanism. UK-based organisations with operations overseas can use the DECC/Defra tool, and incorporate GHG Protocol factors for activities in specific countries
Carbon Trust Standard – Standard developed by the Carbon Trust and launched in UK in 2008, and Carbon Trust Equivalent standards The CTS was developed to provide a basis for organisations to demonstrate early action for the CRC. A range of equivalent standards have now been approved
Carbon Disclosure Project (CDP) The CDP is a mechanism for large organisations to report on their footprints, using the GHG Protocol approach
GHG Protocol Draft Corporate Value Chain (Scope 3) Accounting and Reporting Standard More detailed guidance on Scope 3 issues, to be published later in 2011
Regional accounting and reporting schemes There are numerous existing and emerging schemes in different global region

Development emissions

Environmental impact assessment is a long-established process for considering the potential impacts of projects and developments. However, there is little published guidance for assessing the climate change impacts of proposed developments.

IEMA has published the Climate Change Mitigation and EIA principles, which emphasise the need to consider climate change implications at an early stage of the planning and design process. The assessment should address alternative options and the whole life impacts, including construction, embodied energy in materials, operational emissions and decommissioning.

The principles extend to the assessment, reporting and follow-up of climate change impacts in the EIA process, and also refer to a hierarchy for managing project-related GHG emissions, of avoidance, reduction, substitution and compensation (off-setting).

IEMA understands that the European Commission is currently in the process of producing guidance on considering climate change in both EIA and SEA, which is expected to be available to Member States towards the end of 2011.

Installation emissions

There are a number of mandatory regimes for emissions reporting for specific installations, in different parts of the world. The EU Emissions Trading System imposes obligations on operators of large combustion installations (eg power stations) and of processes (eg cement works) to report on GHG emissions and to participate in a cap-and-trade scheme.

The European Commission Monitoring and Reporting Guidelines impose specific and detailed sector-based requirements for monitoring, measurement, calculation, reporting and verification of relevant emissions data, including the development of an approved monitoring plan and a verification methodology.

Accredited verifiers must conform to European Accreditation guidelines EA 6/03 rev 03 - EA Document for Recognition of Verifiers under the EU ETS Directive. This references ISO 14065:2007 - Greenhouse Gases – Requirements for greenhouse gas validation and verification bodies for use in accreditation or other forms of recognition, which sets out requirements for greenhouse gas validation and verification bodies. In the US, there is a similar threshold-based Annual Emissions Reporting Rule for large installations.

Reduction projects and offsetting

Established under the Kyoto Protocol, the Clean Development Mechanism (CDM) is a scheme for encouraging GHG emission reduction projects by generating carbon credits for sale to entities wishing to offset their emissions.

The CDM has detailed rules (modalities and procedures) for the approval of individual projects. These extend to the process for designing a scheme, and having it validated, and the emissions verified.

Validation is the process whereby the potential of a project to capture or reduce emissions is assessed (this includes the proposed accounting methodology) against a baseline scenario, to demonstrate that the reduction would not have occurred without the project (“additionality”).

Verification involves auditing actual performance to quantify the reductions achieved, and is undertaken annually. The scheme and accreditation of validators and verifiers is stringently managed by the UNFCCC. The carbon credits generated can be traded within the EU ETS and other cap and trade schemes.

In addition to the CDM, there are many other entities offering carbon credits for off-setting.

The validity or credibility of some “voluntary offsets” has been questioned in recent years. Many, however, have invested in their procedures to provide increased confidence. Examples include the Gold Standard and the Voluntary Carbon Standard (VCS). These both have robust verification and registry processes, with the VCS stipulating that verifiers must be CDM-approved or conform to ISO14065:2007, which sets out requirements for greenhouse gas validation and verification bodies.

The UK government’s Quality Assurance Scheme (2008) for Carbon Offsetting (QAS) was designed to provide consumers with confidence in the validity of offset schemes.

It only recognised Kyoto-compliant offsets.

At time of writing the scheme is being closed following departmental review by DECC. Conversely, the Australian National Carbon Offset Standard recognises the Gold Standard and the Voluntary Carbon Standard in addition to Kyoto-compliant offsets.

A key standard for project-related emissions is ISO14064 Part 2 Greenhouse Gases. Specification with guidance at the project level for quantification, monitoring and reporting of greenhouse gas emissions reductions or removal enhancements.

The standard focuses on GHG projects or project-based activities specifically designed to reduce GHG emissions or increase GHG removals. Again, it does not specify precise calculation methodologies, but includes principles and requirements for determining project baseline scenarios and for monitoring, quantifying and reporting project performance relative to the baseline scenario and provides the basis for GHG projects to be validated and verified.

The Greenhouse Gas Protocol for Project Accounting follows a similar framework. The GHG Protocol also provides various sector guides and cross-sector guidance.

Products and services footprinting

Following a successful trial involving Walkers crisps, PAS 2050:2008 Specification for the assessment of the lifecycle greenhouse gas emissions of goods and services, was developed and published by BSI. It provides guidance in the application of a life-cycle assessment approach to determining the carbon (GHG) footprint of goods or services.

It is applicable to all products (goods and services) and can be used by all sizes and types of organisation. It requires the consideration of all lifecycle stages along the supply/value chain (cradle to grave) and all GHGs. The resulting footprint can be self-verified or confirmed by external/certified verification.

PAS 2050 is currently undergoing revision (BSI seek to review all Publicly Available Specifications on a 2 year cycle). At international level, ISO14067, for the carbon footprint of products, is in development. The GHG Protocol has produced a second draft of a new Product Accounting and Reporting Standard, which will be finalized and published later in 2011.


There are three related ISO standards for GHG verification. ISO 14064 Part 3 Principles for the validation/ verification process for organisational or project “assertions” can be used by organisation in developing accounting processes that are auditable under formal verification, as well as being the basis for a verifier’s work.

ISO 14065:2007 sets out requirements for greenhouse gas validation and verification bodies for use in accreditation. It will be augmented by ISO 14066 (published May 2011) on competence requirements for conducting greenhouse gas validation and verification engagements, with guidance for evaluation.

Organisations intending to seek external validation or verification of GHG or carbon footprints should ensure that the verifiers conform (or are accredited) to the requirements of these standards.

Under the EU Emissions Trading Scheme, accredited verifiers must conform to European Accreditation guidelines EA 6/03 January 2010 rev 03. The forthcoming International Standard ISAE 3410 Assurance Engagements on Greenhouse Gas (GHG) Statements, to be published by the International Federation of Accountants / Auditing and Assurance
Standards Board, will be applicable to organisational footprints where the verifier is a professional accounting firm bound by the IASB requirements.

Wider standards and schemes of relevance

Both ISO 14001 for environmental management systems and the EU’s Eco-Management and Audit Scheme (EMAS), include provisions for identifying environmental issues and for monitoring and data collection based on the plan-do-check-act model, which can be applied to GHG emissions.

Organisations with environmental management systems should already have these processes in place to capture emissions data (and for those subject to legal requirements, for example of the EU ETS or CRC, the EMS should already be actively incorporating the monitoring and reporting requirements of this legislation).

Additionally, EMAS requires the production of a report of environmental performance, including emissions. The certification of management systems should provide some degree of credibility to these processes, provided that the certification body auditor is also competent in GHG accounting and verification.

The Global Reporting Initiative Sustainability Reporting Guidelines (version G3) are used by a growing number of organisations as the basis for preparing annual corporate sustainability reports.

The guidelines include requirements for the approach to reporting and sets of key performance indicators for environmental, social and worker welfare issues. Of the 30 environmental indicators, a number relate to GHG emissions and energy consumption. The CDP and the Global Reporting Initiative have recently published a linking document, which aligns the CDP questions with the relevant G3 KPIs.

Claims-related standards and schemes

The use of PAS 2050 for products can be supported by the Code of Good Practice for Product GHG Emissions and Reduction Claims, which was developed by the Carbon Trust and the Energy Saving Trust to provide guidance on how to communicate the life cycle GHG emissions of products clearly and credibly.

Similarly Part 2 of the forthcoming ISO 14067, for the carbon footprint of products, deals with communication.

The PAS 2060 Specification for the demonstration of carbon neutrality is applicable to anything from a product to a city. It addresses the quantification of the entity’s carbon footprint, the commitment to carbon neutrality, the achievement of GHG emissions reductions, offsetting residual GHG emissions, declarations (in respect of carbon neutrality) and maintaining carbon neutral status. A separate IEMA briefing note on carbon neutrality is also available.


BS EN 16001 comprises a management systems standard focusing on energy, based on the plan-do-check-act model. Its structure is comparable to (and can be integrated with) ISO 14001, with elements for policy, energy aspects, objectives and targets, competence, operational control, monitoring, audit, etc.

The clauses of the standard are concise, but some of the additional guidance in Annex A is more detailed. The energy aspects, operational control and monitoring sections particularly provide helpful guidance in identifying, managing and measuring key energy consumption activities.

The ISO 50001 standard for energy management is in development, bound by the IASB requirements.


There are various other schemes and standards relevant to GHG accounting and reporting, including those for energy management, carbon neutrality and broader environmental management and reporting.

Key resources

IEMA Practitioner 14 Mitigating Climate Change - a guide for organisations, and supporting guides and case studies

IEMA Special Report – Greenhouse Gas Management and Reporting

Defra / DECC GHG reporting guidance

GHG Protocol

For more information call CALL 01522 540069 or visit

This the second in IEMA’s e-Briefing series. Visit the IEMA website for more.

This IEMA e-Briefing was written by Nigel Leehane, managing director of CRA (Europe) and project managed by Nick Blyth, senior adviser climate change, IEMA.

IEMA would like to thank the following contributers and peer reviewers:

  • Lucy Candlin, director, Planet & Prosperity
  • Paul Smith, climate change manager, LRQA.
  • David Robinson, greenhouse gas scheme manager, CICS
  • Marek Bidwell, Bidwell Management Systems
  • Bekir Andrews, sustainability manager, Romec
  • Martin Baxter, Nick Blyth and Josh Fothergill from IEMA


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