GHG Protocol Corporate Standard
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The Greenhouse Gas Protocol — 390 — 370 — 350 — 330 — 310 — 290 — 270 ppm Year: 1000 1500 2000 A Corporate Accounting and Reporting Standard REVISED EDITION WORLD RESOURCES INSTITUTE GHG Protocol Initiative Team Janet Ranganathan World Resources Institute Laurent Corbier World Business Council for Sustainable Development Pankaj Bhatia World Resources Institute Simon Schmitz World Business Council for Sustainable Development Peter Gage World Resources Institute Kjell Oren World Business Council for Sustainable Development Revision Working Group Brian Dawson & Matt Spannagle Australian Greenhouse Office Mike McMahon BP Pierre Boileau Environment Canada Rob Frederick Ford Motor Company Bruno Vanderborght Holcim Fraser Thomson International Aluminum Institute Koichi Kitamura Kansai Electric Power Company Chi Mun Woo & Naseem Pankhida KPMG Reid Miner National Council for Air and Stream Improvement Laurent Segalen PricewaterhouseCoopers Jasper Koch Shell Global Solutions International B.V. Somnath Bhattacharjee The Energy Research Institute Cynthia Cummis US Environmental Protection Agency Clare Breidenich UNFCCC Rebecca Eaton World Wildlife Fund Core Advisors Michael Gillenwater Independent Expert Melanie Eddis KPMG Marie Marache PricewaterhouseCoopers Roberto Acosta UNFCCC Vincent Camobreco US Environmental Protection Agency Elizabeth Cook World Resources Institute Table of Contents Introduction The Greenhouse Gas Protocol Initiative 2 Chapter 1 GHG Accounting and Reporting Principles STANDARD GUIDANCE 6 Chapter 2 Business Goals and Inventory Design GUIDANCE 10 Chapter 3 Setting Organizational Boundaries STANDARD GUIDANCE 16 Chapter 4 Setting Operational Boundaries STANDARD GUIDANCE 24 Chapter 5 Tracking Emissions Over Time STANDARD GUIDANCE 34 Chapter 6 Identifying and Calculating GHG Emissions GUIDANCE 40 Chapter 7 Managing Inventory Quality GUIDANCE 48 Chapter 8 Accounting for GHG Reductions GUIDANCE 58 Chapter 9 Reporting GHG Emissions STANDARD GUIDANCE 62 Chapter 10 Verification of GHG Emissions GUIDANCE 68 Chapter 11 Setting GHG Targets GUIDANCE 74 Appendix A Accounting for Indirect Emissions from Electricity 86 Appendix B Accounting for Sequestered Atmospheric Carbon 88 Appendix C Overview of GHG Programs 90 Appendix D Industry Sectors and Scopes 92 Acronyms 95 Glossary 96 References 103 Contributors 104 Introduction he Greenhouse Gas Protocol Initiative is a multi-stakeholder partnership of businesses, non-governmental organizations (NGOs), governments, and others T convened by the World Resources Institute (WRI), a U.S.-based environmental NGO, and the World Business Council for Sustainable Development (WBCSD), a Geneva-based coalition of 170 international companies. Launched in 1998, the Initiative’s mission is to develop internationally accepted greenhouse gas (GHG) accounting and reporting standards for business and to promote their broad adoption. The GHG Protocol Initiative comprises two separate but linked standards: • GHG Protocol Corporate Accounting and Reporting Standard (this document, which provides a step-by-step guide for companies to use in quantifying and reporting their GHG emissions) • GHG Protocol Project Quantification Standard (forthcoming; a guide for quantifying reductions from GHG mitigation projects) 2 INTRODUCTION 3 The first edition of the GHG Protocol Corporate Accounting and The business value of a GHG inventory Reporting Standard (GHG Protocol Corporate Standard), published in Global warming and climate change have come to the fore as a September 2001, enjoyed broad adoption and acceptance around the key sustainable development issue. Many governments are taking globe by businesses, NGOs, and governments. Many industry, NGO, steps to reduce GHG emissions through national policies that and government GHG programs1 used the standard as a basis for include the introduction of emissions trading programs, voluntary their accounting and reporting systems. Industry groups, such programs, carbon or energy taxes, and regulations and standards as the International Aluminum Institute, the International Council on energy efficiency and emissions. As a result, companies must of Forest and Paper Associations, and the WBCSD Cement be able to understand and manage their GHG risks if they are to Sustainability Initiative, partnered with the GHG Protocol Initiative ensure long-term success in a competitive business environment, to develop complementary industry-specific calculation tools. and to be prepared for future national or regional climate policies. Widespread adoption of the standard can be attributed to the inclu- A well-designed and maintained corporate GHG inventory can sion of many stakeholders in its development and to the fact that serve several business goals, including: it is robust, practical, and builds on the experience and expertise of numerous experts and practitioners. • Managing GHG risks and identifying reduction opportunities This revised edition of the GHG Protocol Corporate Standard is the • Public reporting and participation in voluntary GHG programs culmination of a two-year multi-stakeholder dialogue, designed • Participating in mandatory reporting programs to build on experience gained from using the first edition. It includes additional guidance, case studies, appendices, and a new chapter • Participating in GHG markets on setting a GHG target. For the most part, however, the first edition • Recognition for early voluntary action. of the Corporate Standard has stood the test of time, and the changes in this revised edition will not affect the results of most GHG inventories. Who should use this standard? This GHG Protocol Corporate Standard provides standards and This standard is written primarily from the perspective of a busi- guidance for companies and other types of organizations2 ness developing a GHG inventory. However, it applies equally to preparing a GHG emissions inventory. It covers the accounting other types of organizations with operations that give rise to GHG and reporting of the six greenhouse gases covered by the Kyoto emissions, e.g., NGOs, government agencies, and universities.3 Protocol — carbon dioxide (CO2), methane (CH4), nitrous oxide It should not be used to quantify the reductions associated with (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), GHG mitigation projects for use as offsets or credits—the and sulphur hexafluoride (SF6). The standard and guidance were forthcoming GHG Protocol Project Quantification Standard will designed with the following objectives in mind: provide standards and guidance for this purpose. • To help companies prepare a GHG inventory that represents Policy makers and architects of GHG programs can also use rele- a true and fair account of their emissions, through the use of vant parts of this standard as a basis for their own accounting standardized approaches and principles and reporting requirements. • To simplify and reduce the costs of compiling a GHG inventory • To provide business with information that can be used to build an effective strategy to manage and reduce GHG emissions • To provide information that facilitates participation in voluntary and mandatory GHG programs • To increase consistency and transparency in GHG accounting and reporting among various companies and GHG programs. Both business and other stakeholders benefit from converging on a common standard. For business, it reduces costs if their GHG inventory is capable of meeting different internal and external information requirements. For others, it improves the consistency, transparency, and understandability of reported information, making it easier to track and compare progress over time. Introduction Relationship to other GHG programs GHG calculation tools It is important to distinguish between the GHG Protocol Initiative To complement the standard and guidance provided here, and other GHG programs. The GHG Protocol Corporate Standard a number of cross-sector and sector-specific calculation tools focuses only on the accounting and reporting of emissions. It does are available on the GHG Protocol Initiative website not require emissions information to be reported to WRI or WBCSD. (www.ghgprotocol.org), including a guide for small office-based In addition, while this standard is designed to develop a verifiable organizations (see chapter 6 for full list). These tools provide step- inventory, it does not provide a standard for how the verification by-step guidance and electronic worksheets to help users process should be conducted. calculate GHG emissions from specific sources or industries. The tools are consistent with those proposed by the Intergovernmental The GHG Protocol Corporate Standard has been designed to be Panel on Climate Change (IPCC) for compilation of emissions program or policy neutral. However, many existing GHG programs at the national level (IPCC, 1996). They have been refined to be use it for their own accounting and reporting requirements and it user-friendly for non-technical company staff and to increase the is compatible with most of them, including: accuracy of emissions data at a company level. Thanks to help • Voluntary GHG reduction programs, e.g., the World Wildlife Fund from many companies, organizations, and individual experts (WWF) Climate Savers, the U.S. Environmental Protection through an intensive review of the tools, they are believed to Agency (EPA) Climate Leaders, the Climate Neutral Network, represent current “best practice.” and the Business Leaders Initiative on Climate Change (BLICC) • GHG