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Accounting and reporting principles

Author

Shel

General accepted GHG accounting principles are intended to guide GHG accounting and reporting to ensure the reported inventory represents a faithful, true and fair account of a company’s GHG emissions.

The GHG Protocol outlines the following five principles.

1. Relevance

A relevant GHG report appropriately reflects the GHG emissions of the company and serves the decision-making needs of stakeholders.

Companies should use this principle i) when determining whether to exclude any activities from the inventory boundary ii) as a guide when selecting data sources. Companies should collect high quality data to ensure that the GHG inventory is relevant.

2. Completeness

Companies should ensure that the scope 3 inventory reflects the GHG emissions of the company, and serves the decision-making needs of internal and external stakeholders.

Companies should not exclude any activities from the scope 3 inventory that would compromise the relevance of the reported inventory.

All exclusions should be documented and justified.

3. Consistency

Consistent application of accounting approaches, inventory boundary, and calculation methodologies is essential to producing comparable GHG emissions data over time. This can help stakeholders track emissions over time in order to identify trends and assess the performance of the reporting company.

4. Transparency

A transparent report provides a clear understanding of the relevant issues and a meaningful assessment of emissions performance of the company’s scope 3 activities.

Information on the processes, procedures, assumptions and limitations of the GHG inventory should be disclosed in a clear, factual, neutral, and understandable manner based on clear documentation.

It should be recorded, compiled, and analyzed in a way that enables internal reviewers and external assurance providers to attest to its credibility.

Specific exclusions need to be clearly identified and justified, assumptions disclosed, and appropriate references provided for the methodologies applied and the data sources used.

The information provided should be sufficient to enable a party external to the inventory process to derive the same results if provided with the same data.

5. Accuracy

Data should be sufficiently accurate to enable intended users to make decisions with reasonable confidence that the reported information is credible.

Estimated data should be as accurate as possible to guide the decision-making needs of the company and ensure that the GHG inventory is relevant.

Companies should try their best to reduce uncertainties in the quantification process and ensure that data are sufficiently accurate to serve decision-making needs.

Next: Calculating emissions