An overview of the most important standards and initiatives
The Climate Disclosure Standards Board (CDSB) released an updated version of its environmental reporting framework on April 9. This is now in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). For companies that used to focus on the CDSB in disclosing their climatic effects, there are some changes that can be seen in detail in the new framework.
If a company wants to calculate and disclose its own effects on the global climate, it is confronted with a wide variety of standards, guidelines and initiatives. This blog article is intended to give a brief overview of the most important points.
Calculation of greenhouse gas emissions
Anthropogenic climate change and its consequences for the future is a major problem that states, businesses and individuals must address. The Kyoto Protocol of 1997 determines that states should actively promote the protection of world’s climate. In 2015, the member states of the United Nations decided to limit global warming to well below 2 ° C compared to the beginning of industrialization.
Also, companies are asked to assess or report GHG emissions by business partners or the legislation. So-called science-based targets ensure that companies can tailor their emission reductions to a concrete objective in order to counteract climate change more effectively.
However, before a company can set reduction targets, the current emissions of climate-relevant gases must be calculated. This is called the Corporate Carbon Footprint (CCF). For the calculation, there are different methods or standards that can be used.
The most widely used is the Greenhouse Gas Protocol (GHG Protocol). The development of this is coordinated by the World Resource Institute and the World Business Council for Sustainable Development. It captures all the gases of the Kyoto Protocol. The calculation distinguishes between three different scopes: direct emissions, indirect emissions from purchased energy and all other indirect emissions in the upstream and downstream supply chain. Numerous other standards such as ISO 14046 are based on the GHG Protocol, which further enhances its importance.
Disclosure of greenhouse gas emissions
If a company wants or must disclose the calculated emissions, it is, for example, possible to participate in the Carbon Disclosure Project (CDP). This is an NGO founded in London in 2000 to help companies disseminate environmental data. Once a year, the CDP uses standardized questionnaires to collect data on companies’ CO2 emissions, climate risks and reduction targets, and now manages the largest database of its kind worldwide. More and more companies are calling on their suppliers to participate in the CDP program.
There are also various initiatives for the disclosure of climate-relevant data in reports. Some of these, such as GRI or UNGC, are specifically aimed at sustainability reports. Others, such as the Climate Disclosure Standards Board (CDSB), promote the standardization of climate change data in traditional corporate reports.
There are also various guidelines for individual aspects that companies can use to orient themselves. The Task Force on Climate-related Financial Disclosures (TCFD) was established by the Financial Stability Board (FSR) to develop voluntary, consistent information on climate-related financial risks. These can be used by companies to provide relevant information to stakeholders. Such special standards often fit into more general guidelines, as happened in the case of CDSB.
At both, national and sectoral levels, there are other guidelines that entrepreneurs can use to orient themselves or align with stakeholders. If you have questions about specific standards or how to deal with climate change in general, feel free to contact the DFGE experts. With years of experience in calculating corporate and product carbon footprints in accordance with the GHG Protocol and ISO 14046 and the fact that DFGE is the official CDP Silver Climate Change Consultancy Partner, we can help you align your business with a sustainable future and the requirements of your stakeholders.
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