4 lessons from corporate GHG accounting implementation

The opinions expressed here by Trellis expert contributors are their own, not those of Trellis.

Three years ago, I left my job on the corporate sustainability team at a Fortune 100 company to jump back into the work of getting greenhouse gas (GHG) accounting standards and policy right. It wasn’t because I missed the intricacies and vagaries of GHG accounting. Quite the opposite: I left because it was clear that the current set of GHG accounting and target-setting rules are failing us, and that millions of dollars, and more importantly millions of tons of carbon dioxide, are sitting on the sidelines as a result. 

Working closely with non-sustainability professionals for the first time in my career was eye-opening. I had prided myself on my ability to swim through the alphabet soup of sustainability acronyms with ease, rattling off the ins-and-outs of consequential versus attributional accounting and the distinctions between a renewable energy certificate and an offset. 

But my first few months on the job were a bewildering series of meetings during which I said lots of words and the company’s executives looked at me like I was speaking Mandarin. They grew frustrated by my inability to explain the complicated mess of climate concepts, standards and approaches in language they could understand. 

Those early days on the job provided a crucial lesson on the need to speak the language of, and to the interests of, the people and institutions sustainability leaders are working to influence. I had known that was the case, but my experience made me realize how poor a job we’ve done at taking complex and nuanced concepts and rule sets and making them accessible for non-experts managing for an entirely different set of objectives. 

Multiple standards 

Moreover, when I went to report on all the progress we made in implementing energy efficiency measures and renewable energy certificates, none of it “counted” towards our GHG inventory targets. That was because there was no clear, third-party guidance for how to report on the outcomes of the actions we were taking towards our science-based target. 

A peer who worked at a multinational food company described his efforts to convince dairy suppliers to build a whole-farm strategy for reducing emissions. He said he needed to use six different standards to account for and report the various interventions occurring across their supply chain. 

This lack of clarity around the accounting rules, combined with increasingly narrow and stringent definitions of credible net zero targets, meant that demonstrating progress became incredibly difficult and increasingly expensive. 

That’s why we started the Taskforce for Corporate Climate Action Transparency: not because the world needs another NGO standard-setter, but because companies need third-party assurable and clear disclosure and transparency guidance for their lawyers and accountants. The task force’s detailed guidance provides clarity to companies seeking to report and reflect their mitigation actions and outcomes across all three scopes of their carbon footprints.  

Clear, simple and comprehensive

Today’s GHG accounting systems are complex, convoluted and filled with eye-glazing jargon. The companies trying to use them need small armies of consultants and entire internal teams who spend their days poring over and parsing detailed rules that are either silent on the issues that matter or fundamentally unworkable in the real world. Many of the voluntary corporate standards are at varying levels of being updated. In my mind, these are must-haves for the next set of guidance: 

• Coherence and convergence must be the name of the game. Clear, simple and comprehensive accounting and disclosure guidance is needed for companies, and where standards can converge, we should prioritize that. 
• Standards must balance continuous improvement and real world implementation pragmatism while driving towards greater environmental impact. 
• A clear path and transition timeline with grandfathering provisions must be developed to protect long-term investments made under previous rule sets. Future standards updates should be scheduled and occur no more or less frequently than every five years. 
• Oversight and governance must be improved. The NGO standards-setting bodies should treat their development and update processes as quasi-regulatory, following best practices and ensuring fair and balanced representation across stakeholder groups on decision making and governing bodies. 

I’m confident that we can do this. Let’s roll up our sleeves and deliver a set of high integrity, pragmatic and effective climate inventory and target accounting and reporting systems that work in the real world. All of the pieces of the puzzle are on the table; now we just need to put them together.