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During the 2000s, various calculation methods emerged to account for a company's greenhouse gas (GHG) emissions. This is commonly known as carbon accounting. In this article, we have chosen to focus on the main frameworks used: GHG Protocol, BEGES, and Bilan Carbone. Despite their specific characteristics, they are all compatible with the reference ISO standard on the subject, ISO 14064.
TheISO 14064 is a voluntary global standard that provides guidelines for measuring greenhouse gas (GHG) emissions in organizations. Published in 2006, its objective is to integrate with other energy and environmental standards. All methods mentioned below are therefore in accordance with this standard.
Understanding the major carbon accounting standards.
➡️ GHG Protocol
The GHG Protocol or the "Greenhouse Gas Protocol Corporate Accounting and Reporting Standard" is a methodology created in 1998 and now widely adopted internationally. This methodology is indeed used as a reference by leading initiatives such as the SBTi and numerous legislations worldwide, such as the European Union and the Corporate Sustainability Reporting Directive (CSRD).
The GHG Protocol categorizes a company's carbon emissions into 3 scopes. Only Scope 1 accounting, related to direct emissions, and Scope 2 accounting, related to indirect emissions from energy use, are mandatory under the methodology.
However, the methodology strongly recommends also accounting for Scope 3 emissions, which encompass all emissions generated by a company's upstream and downstream value chain: raw material purchases, transport, product use, waste, etc.
➡️ GRI 305
The Global Reporting Initiative or GRI, is an independent organization that has developed several standards related to ESG criteria (Environmental, Social, and Governance).
The GRI 305 standard encompasses all gas emissions generated by a company. The GRI 305 recommendations regarding GHG accounting refer entirely to the GHG Protocol methodology. Thus, the GRI 305 carbon accounting methodology is equivalent to that of the GHG Protocol.
➡️ BEGES
The BEGES or Greenhouse Gas Emissions Assessment, is a mandatory exercise for all companies operating in France with more than 500 employees in mainland France and 250 employees in overseas departments and regions.
All direct emissions (Scope 1), energy-related indirect emissions (Scope 2), as well as all significant indirect emissions (scope 3) must be accounted for in the BEGES methodology. The BEGES methodology is in its 5th regulatory version, with its latest updates becoming mandatory in January 2023. To learn more, read our article on the subject here.
Significant indirect emissions include those related to energy, transport, and purchased and sold products. These significant indirect emissions are defined after conducting the most exhaustive possible BEGES.
➡️ Bilan carbone®
Created by ADEME in 2004, the Bilan Carbone is, in France, the historical methodological standard for quantifying GHG emissions.
Since 2011, the Association for Low Carbon Transition (ABC), co-founded by ADEME and APCC (Association of Climate, Energy and Environment Consulting Professionals), has been promoting and disseminating the Bilan carbone® brand and methodology.
Today, this methodology is widely used and followed by French companies. Its dissemination has notably led to the democratization of carbon accounting and the concept of corporate carbon footprint.
What differentiates carbon accounting standards?
Despite some apparent homogeneity among the various standards and norms, there are nevertheless notable differences in methodologies, scopes, and actionability that should be understood.
The differences in carbon accounting.
The calculation methods and scopes considered by existing standards differ on certain points, including:
- the carbon footprint of visitor or customer travel is not taken into account in the GHG Protocol,
- depreciation is generally treated with a "stock" approach in BEGES and a "flow" approach in the GHG Protocol,
- biomass is accounted for differently depending on the methodologies,
- investments are not taken into account in Bilan Carbone®, unlike in BEGES and the GHG Protocol,
- franchises no longer exist as a separate item in BEGES.
Another major difference between the standards concerns Scope 3. Indeed, the GHG Protocol does not require companies to conduct a carbon footprint assessment of upstream and downstream indirect emissions, unlike BEGES and Bilan Carbone®. In practice, most companies following the GHG Protocol framework still conduct a carbon assessment for their Scope 3, particularly with the aim ofbeing SBTi certified (Science Based Target initiative).
Differences in expected carbon accounting-related data.
Finally, these methodologies also mandate or recommend certain additional information beyond simple emissions accounting, and these also vary.
For example, it is mandatory to report uncertainties related to emission sources within a Bilan Carbone® framework, which is only optional under a BEGES or GHG Protocol reporting.
Furthermore, the transition plan required by BEGES, comprising an assessment of past actions, medium and long-term objectives, an action plan, and expected reduction volumes, is not required by other methodologies, although Bilan Carbone® and the GHG Protocol recommend conducting a review of past actions
Ultimately, how do you choose the carbon methodology that best suits your company?
Overall the 3 methodological standards described here are generally similar and equally valid and ensure, if rigorously followed, precise and actionable carbon accounting. Measuring GHG emissions is certainly not an end in itself. The corporate carbon assessment is, however, the necessary prerequisite for any concrete action.
Whether you want to conduct your first carbon footprint assessment or implement regular carbon measurement, it is important from the outset to set a high standard for the quality of the carbon accounting performed, otherwise you may not obtain usable accounting data to truly decarbonize your company.
Carbon measurement should be a recurring exercise, allowing you to track your efforts over time and maintain a good reduction trajectory. Companies that delay in conducting serious carbon accounting for their activities fall behind in the upcoming low-carbon transition, which no organization will escape. In any case, seriously conducted carbon accounting will require the same level of investment regardless of the methodology chosen.
The challenge for companies today therefore lies more in committing to regular carbon measurement and, above all, to the actual implementation of reduction actions, rather than in choosing between three inherently robust methodological standards. That said, to select the methodology best suited to your organization, it is important to consider the regulatory framework in which it operates.
If you wish to commit your company to a serious low-carbon transition, schedule a meeting with our team to discover how the carbon assessment platform from Traace can provide you with the highest quality carbon accounting and enable you to effectively manage your climate action plan.
Sources
https://www.ecologie.gouv.fr/decret-bilan-des-emissions-gaz-effet-serre-beges
https://ghgprotocol.org/sites/default/files/standards/ghg-protocol-revised.pdf
https://www.ecologie.gouv.fr/sites/default/files/methodo_BEGES_decli_07.pdf