New Guidelines on Supply Chain and Lifecycle Greenhouse Gas Accounting and Reporting in Planning Process

With “carbon footprint” increasingly becoming a popular buzzword within the corporate lexicon, companies are seeking more guidance on how to develop fuller and more accurate pictures of their greenhouse gas emissions, particularly in terms of supply chain, lifecycle, and product emissions.

In recent months, many companies and stakeholders have been looking to the GHG Protocol to develop new guidelines on supply chain and lifecycle GHG accounting. In response to this demand, WRI and WBCSD designed a survey to assess the need for new guidelines and sent the survey to roughly 400 companies, experts, and other stakeholders. The nearly 100 responses sent a clear signal for the GHG Protocol to develop new guidelines in this area. As a result, WRI and WBCSD are seeking to complete the consultation process and move forward with the initiation of new guidelines on supply chain and lifecycle greenhouse gas accounting and reporting in spring 2008.

The new standard will provide additional guidance on accounting for Scope 3 or Other indirect emissions.
The existing GHG Protocol standards have become recognized as internationally accepted best practice in greenhouse gas reporting at the corporate and project levels. New guidelines would build on and elaborate on the existing framework to include supply chain and lifecycle accounting, which fall into the “scope 3″ or “other” indirect greenhouse gas emissions category in the existing Corporate Standard, but need further guidance and standardization. These new guidelines would represent the development of the GHG Protocol’s third major standard.

“Companies are increasingly interested in providing ‘climate friendly’ or ‘carbon neutral’ products and services to their customers, yet there are few established rules for which GHG emissions to include in a corporate or product-level ‘carbon footprint,’ and techniques for quantifying emissions associated with certain elements of the supply chain are still evolving. It’s a question of where to set the boundaries for Scope 3 reporting as much as anything else,” said Derik Broekhoff, a Senior Associate at WRI.

In developing these new guidelines, the GHG Protocol would follow the same broad, multi-stakeholder process used to develop our previous standards. The first step in the process will be to determine the scope of the guidelines, such as whether they address corporate supply chains versus a full lifecycle assessment, and whether the analysis focuses on products or organizations. WRI and WBCSD hope the new guidelines will allow companies to make a more comprehensive assessment of their greenhouse gas emissions along their supply chain and better incorporate GHG impacts into business decision-making. New guidelines would also help consumers and businesses customers make purchasing decisions that better incorporate greenhouse gas impacts.

The GHG Protocol’s goal in undertaking this initiative is to harmonize and build upon emerging schemes to assess supply chain and lifecycle accounting undertaken by other organizations, such as the Carbon Trust, British Standards Institute, and UK Defra; the International Organization for Standardization (ISO); the Carbon Disclosure Project; and others. WRI and WBCSD are in dialogue with these and other key partners to design a comprehensive and effective process for moving forward.

For more information on the current status of these initiatives, click here.