International Carbon Accounting Standards

Carbon footprinting refers to the process of measuring and quantifying the total greenhouse gas emissions produced by an individual, organization, product, or activity. It is a crucial tool in assessing and managing the environmental impact of businesses and activities, particularly in the context of climate change mitigation. Here, Minimum explores the international carbon accounting standards that underpin the industry and ensure accuracy and comparability between businesses.

What international standards are there?

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.

Greenhouse Gas Protocol (GHG)

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

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 14064-1 - this specifies requirements for designing and developing GHG inventories and covers direct emissions from an organization's activities (Scope 1) and indirect emissions from purchased electricity, heat, or steam (Scope 2).
• ISO 14064-2 - this provides guidelines for quantifying GHG emissions and removals from projects or activities that result in emission reductions or removal enhancements.
• ISO 14064-3 - this outlines principles and requirements for verifying an organization's GHG inventory and projects.

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.

Partnership for Carbon Accounting Financials (PCAF)

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:

• Banks
• Asset managers
• Pension funds
• Other financial entities

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

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:

1. Assessing GHG emissions: This involves measuring and quantifying all direct and indirect emissions associated with its operations, products, or activities. The assessment must adhere to internationally recognized GHG accounting standards.
2. Reduction of emissions: This stage focuses on implementing energy efficiency measures, transitioning to renewable energy sources, optimizing processes, and adopting sustainable practices to minimize emissions wherever possible.
3. Carbon offsetting: In this stage, the organization addresses any remaining emissions that cannot be completely eliminated through reduction and avoidance measures. It purchases high-quality carbon offsets, which are verified emission reduction projects that take place outside the organization.
4. Verification: This claim must be transparently documented, and the organization should undergo independent third-party verification to validate its carbon neutrality status. Verification ensures that the organization's carbon neutrality claim aligns with the requirements of PAS 2060 and that the offset projects used meet the necessary standards.

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.

Why adherence matters

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: 

• Both the GHG Protocol and ISO 14064 are standards that provide guidelines and methodologies for measuring, reporting, and verifying GHG emissions. 
• The Partnership for Carbon Accounting Financials (PCAF) builds on the principles and methodologies outlined in Category 15 (Financing) of the GHG Protocol's Corporate Accounting and Reporting Standard (Scope 3).

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.

Accuracy and transparency within own operations to target reductions

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.

Comparability within an industry to benchmark performance and report on progress

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.

Demonstrate a robust commitment to carbon reduction

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.

How Minimum can help

If you’re looking into carbon accounting, then Minimum’s emissions data platform can help. The benefits of utilizing a data platform such as ours are:

• Experts ensure footprint calculated inline with the appropriate standard
• Calculation engine that can adapt with evolving standards
• System of record, single truth
• Detailed data ingestion methods (e.g. API)
• Rebaselining when there are changes in emission factors, organizational boundaries, or reporting methodologies
• Audit-proof carbon footprints

Our Emissions Data Platform seamlessly collects and processes emissions data from every corner of your organization and supply chain - no matter the format. Making it the ideal platform for emissions audits and all-round business intelligence. 

Learn more about how Minimum's Emission Data Platform can help to power you all the way to Net Zero today.