GHG Protocol vs ISO 14064: Key Differences Explained

Overview of GHG Protocol and ISO 14064 Standards

Greenhouse gas (GHG) accounting has become increasingly important for organisations seeking to manage their environmental impact and contribute to climate change mitigation efforts. Two prominent frameworks guide this process: ISO 14064-1:2018 and the GHG Protocol Corporate Standard. While both aim to standardise GHG accounting, they possess distinct characteristics. This article explores the key similarities and differences between these frameworks, providing a comprehensive understanding for researchers and practitioners.

Core Principles and Frameworks

Climate change concerns necessitate robust methodologies for quantifying and reporting organisational GHG emissions. Standardised frameworks offer a transparent and reliable approach for organisations to measure their impact and contribute to environmental sustainability goals. This article examines two leading frameworks: ISO 14064-1:2018 and the GHG Protocol Corporate Standard.

Similarities:

Both ISO 14064-1 and the GHG Protocol share a fundamental foundation in GHG accounting principles. Here are the key areas of alignment:

GHG Scope

Definition: Both frameworks categorise emissions into three scopes: Scope 1 (direct emissions from owned or controlled sources), Scope 2 (indirect emissions from purchased electricity, heat, or steam), and Scope 3 (other indirect emissions throughout the value chain).

In general, the GHG Emissions covered in the Protocol Corporate Standard conform to ISO 14064-1 if significant Scope 3 GHG emissions and GHG removals are both considered.

Quantification Principles: Both emphasize the importance of accuracy, completeness, consistency, transparency, and relevance when quantifying emissions.

GHG Reporting Boundaries: Both require clear definition of the organizational boundaries for which emissions are quantified.

• GHG Inventory: Both frameworks guide the development of
  a GHG inventory, a comprehensive record of all organisational emissions.

Differences:

Despite their shared foundation, key differences exist between the two
frameworks:

• Focus: ISO 14064-1 is a more procedural framework, outlining the steps for
  quantifying, reporting, and verifying GHG emissions. The GHG Protocol, on the other hand, offers detailed guidance on calculating emissions for various activities and sectors but lacks formal verification requirements.

• Level of Detail: The GHG Protocol provides a more comprehensive and detailed approach, including calculation methods, emission factors, and best practices. ISO 14064-1 offers a less prescriptive approach, allowing organisations to choose calculation methodologies based on their specific needs.

• Avoided GHG emissions: The concept of avoided GHG emissions is not addressed in ISO 14064-1.
  However, the GHG Protocol Corporate Standard addresses the quantification of avoided emissions, which are required to be reported separately.

• Verification: Verification by a third-party verifier is optional under the GHG Protocol but mandatory for organisations seeking public disclosure or certification under ISO 14064-1. Verification enhances the credibility and reliability of reported emissions data.

• Value Chain Emissions: While both frameworks acknowledge Scope 3 emissions, the GHG Protocol offers a dedicated standard - the Corporate Value Chain (Scope 3) Standard - providing specific guidance on quantifying these emissions.

• Addressing GHG emissions and removals: ISO 14064-1 clearly address GHG emissions and removals for each category and removals are therefore an inherent part of the GHG
  quantification. The guidance in the GHG protocol is not as clear, but allows for the reporting of removals separately from GHG Emissions.

Verification and Reporting Requirements

The main challenge for organisations is the reporting of indirect emissions (Scope 3), often leading to confusion based on a lack of clarity and understanding of how granular the data needs to be, combined with challenges extracting data from third-parties.

ISO 14064-1 is very clear regarding which Scope 3 emissions are to be
included, whereas the GHG Protocol standard maybe viewed as more open to
interpretation.

ISO 14064-1 includes (in addition to all direct emissions and removals):

1)    Indirect
GHG emissions from purchased energy

2)    Indirect
GHG emissions from transportation

3)    Indirect
GHG emissions from product (s) used by the organisation

4)    Indirect
GHG emissions associated with product (s)from the organisation

5) Indirect emissions from other sources

In contrast, GHG Protocol standards require the inclusion of Scope 2
(indirect emissions from purchased energy); the inclusion of other indirect GHG
Emissions under scope 3 is optional.

The GHG Protocol standard is referred to in various GHG reporting and disclosure initiatives whose requirements for the reporting of the Scope 3 emissions vary. Whereas ISO 14064-1 has been created and approved by representatives from 61 nations to determine a specification for Scope 3 emissions reporting.

Choosing the Right Framework:

The choice between ISO 14064-1 and the GHG Protocol depends on an organisation's specific needs and goals. Here are some considerations:

• Need for Verification: If public disclosure or independent verification is desired, ISO 14064-1 may be the better choice due to its verification component. The governance for this provided in ISO 14064-3; 2019 (Specification with guidance for the verification of GHG Statements).

• Level of detail required: If a detailed approach with extensive calculation guidance is preferred, the GHG Protocol might be more suitable.

• Resource availability: Implementing either standard can be resource-intensive and will be an annual reporting commitment.

• Disclosure reporting requirements: Check which Sustainability disclosures your organisation need to comply with as this could determine which standard is needed and whether verification is optional or mandatory.

Complementary Nature:

While distinct, the two frameworks can be used together effectively. Organisations can utilise the GHG Protocol's detailed guidance to develop their GHG inventory and then follow ISO 14064-1's process for verification and reporting according to the greenhouse gas protocol.

Conclusion:

Both ISO 14064-1 and the GHG Protocol play a crucial role in promoting standardised and reliable GHG accounting practices. Understanding the similarities and differences between these frameworks empowers organisations to select the most appropriate approach for measuring and reporting their
environmental impact. Integrating the strengths of each framework can lead to robust and transparent GHG accounting, ultimately contributing to a more sustainable future.

References:

ISO 14064-1: 2018, Greenhouse gases – Part 1: specification with guidance at the organisation level for quantification and reporting of greenhouse gas emissions and removals.

GHG Protocol Corporate Standard “A Corporate Accounting and Reporting Standards Revised Edition” published by GHG Protocol in 2020, together with its supplement, “Corporate Value Chain (Scope 3) Accounting and Reporting Standard – Supplement to the GHG Protocol Corporate Accounting and Reporting Standard” published by GHG Protocol in 2011.