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green@work : Magazine : Back Issues : Jan/Feb 2002 : Headlines

Headlines
Setting the Standard

How reporting greenhouse gas emissions will change—for the better.


The World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) released an international standard that will enable businesses to uniformly report their emissions of greenhouse gases.

The standard, called the Greenhouse Gas Protocol Initiative or GHG Protocol, was developed over a three-year period by a partnership of over 350 individuals from corporations, non-profit organizations and governments. It is supplemented by a number of user-friendly calculation tools that can be found at www.ghgprotocol.org.

“Unlike for financial accounting and reporting, there are no generally accepted international accounting and reporting practices for corporate emissions of greenhouse gases,” said Kjell Oren, director of WBCSD’s Climate and Energy Program. “GHG Protocol will enable businesses to account and report information from global operations in a way that is consistent with financial reporting standards.”

The GHG Protocol addresses the six greenhouse gases identified by climate treaty negotiators as key contributors to global warming. They are: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulfur hexaflouride (SF6).

"In the future, greenhouse gases will need to be accounted for on a company’s balance sheet in the same way as other assets and liabilities."
—Jonathan Lash, WRI President


“In the future, greenhouse gases will need to be accounted for on a company’s balance sheet in the same way as other assets and liabilities,” added Jonathan Lash, WRI president.

The GHG Protocol provides managers with valuable information on which to build an effective strategy to manage and reduce greenhouse gas emissions. It also provides information that complements other efforts like the U.S. Environmental Protection Agency’s Climate Leaders Initiative, the California Climate Action Registry, the UK Emissions Trading Scheme and the World Wildlife Fund Climate Savers Program.

The development of the GHG Protocol was guided by two simple principles: inclusiveness and transparency. “The GHG Protocol is the common product of numerous individuals and organizations around the globe, united by a shared vision of developing an internationally accepted reporting standard,” said Janet Ranganathan, senior associate in WRI’s Sustainable Enterprise Program, who directed the GHG Protocol Initiative for WRI. “The number of participants who contributed to the GHG Protocol signals a growing acceptance among business, governments, NGOs and other stakeholders of the need for action on climate change.”

The GHG Protocol was road tested by over 30 companies in nine countries, including Dow Chemical Canada, Du Pont, Ford Motor Co., Fortum Power and Heat, General Motors Corp., Hindalco Industries, IBM, Norsk Hydro, Ontario Power Generation, Shell Canada, Tokyo Electric Power Co. and Volkswagen.

Even while international climate negotiators are still working out the details of the Kyoto Protocol, some governments are already taking steps to reduce emissions through voluntary reduction and reporting programs, emissions trading schemes, carbon or energy taxes or regulations and standards on energy efficiency.

However, a credible accounting standard is needed for businesses participating in voluntary initiatives, GHG trading markets and for complying with government regulations. Although there are several efforts to establish guidelines, the GHG Protocol is the first international standard of its kind.

In the future, the GHG Protocol will also develop modules to account for offsets of greenhouse gas emissions like carbon sinks and to consistently account for greenhouse gas emissions throughout the value chains.


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