Written By Geraldine Matchett, Chair of the GHG Protocol Steering Committee

Exciting news comes at times in unexciting forms, and this week's formal launch of the ISO-GHG Protocol partnership at New York Climate Week is probably a case in point. Why should anyone pay attention to the Greenhouse Gas Protocol (GHG Protocol) and the International Organization for Standardization (ISO) forming a new partnership? On the face of it, it is nothing more than two leading standard-setting organisations committing to work together, not much to write home about. And yet, it’s a true game change for a huge number of companies and investors. 

Anyone who is tasked to allocate capital, be it management within companies or investors across companies, is permanently seeking meaningful and reliable data, yet when it comes to carbon emissions that is harder to come by.   

Over the years, we have seen a proliferation of frameworks, standards and guidelines attempting to create reliable carbon accounting. Although they are all well-intentioned, we’ve quickly found ourselves in a quagmire of best practice advice, parallel standards and burgeoning regulation, little of which are aggregable or comparable. Companies have had to choose which standards to use to measure their emissions and drive decarbonisation, while at the same time spending increasing time and resources compiling data, in many different ways, for their various external stakeholders.  

GHG emissions data today is an essential part of decision-making. As the former CEO of a large multinational chemicals and life science company, I can only attest to how embedded it is. What started as an external reporting requirement is now, for many, commonplace in daily business. Carbon travels within value chains, it has a price, it is increasingly specified within customer/supplier relationships, it crosses borders, it is subject to different regulations, and most importantly it is part of many innovation and investment strategies. So, nobody can afford to keep operating in this inefficient and fragmented standards landscape. We all need clear, reliable and verified data. 

Back to the GHG Protocol and ISO partnership: what will it bring?  

Together, the GHG Protocol and ISO standards largely cover, already today, the majority of carbon accounting, underpinning much of the world’s regulations, disclosure requirements and carbon markets. The GHG Protocol ‘Corporate Accounting and Reporting Standards’ and ISO’s 1406X standards series are the most widely used. But here is the problem: these are not harmonised with each other. And as understanding the carbon footprint of products rises in importance, divergence in standards is becoming even more problematic. 

What will emerge from the partnership are co-developed and co-branded standards that are credible, simple and universal. Not only will this make the same reporting useable worldwide, but it will save time and reduce costs. It will enable verification, boost reliability, and provide a sense of confidence to all stakeholders.   

With the potential advent of more and more Carbon Border Adjustment Mechanisms (CBAM) globally (aimed at providing a level playing field in terms of the carbon cost in imported products), comparability of emissions data at the product level will further become particularly critical – yet the risk exists that each region will create its own methodology, especially if there isn’t a broadly endorsed and implemented set of standards already in place. ISO and GHG Protocol are also attempting to address this challenge together. 

At a broader level, the partnership is responding to the recent call by the B7 - a group of business leaders within G7 countries tasked with consolidating the interests of the business community and developing concrete and actionable recommendations to the G7 leadership - for harmonisation in carbon accounting. This is completely understandable. The more emissions are correctly measured, the better those allocating funds or establishing policies can understand, monitor and reduce risks. 

We still have a long road ahead of us, on all these subjects, but I am certain today‘s announcement is a critical step in the right direction. Carbon accounting is here to stay, and we are determined to help make it efficient and reliable, in the interest of all companies, their investors and all stakeholders. And let’s not forget: the reliable measuring, tracking and reporting of GHG emissions is not an end in itself, it is an enabler. By ensuring it can be done well and efficiently, everyone’s energy and attention can be spent on taking action based on that information.