GHG Protocol Expands Standards Board To Align Frameworks

In a milestone action set to redefine corporate climate reporting, the Greenhouse Gas (GHG) Protocol has broadened its Independent Standards Board (ISB) to encompass five prominent sustainability standard-setters as non-voting observers. The addition of CDP, the European Financial Reporting Advisory Group (EFRAG), the Global Reporting Initiative (GRI), the International Sustainability Standards Board (ISSB), and the Science Based Targets initiative (SBTi) represents an important step towards improving alignment between climate disclosure and target-setting regimes.

While these groups will not possess official voting rights, they will exercise strategic control over the creation and updating of the GHG Protocol's standards. This partnership is designed to encourage more harmonisation in greenhouse gas accounting, reporting, and climate target-setting—domains that have become more and more important as companies confront rising regulatory pressures and investor scrutiny.

The release indicates increasing agreement among international standard-setters about the necessity for concerted action to simplify sustainability reporting. The GHG Protocol is generally accepted as the basis for corporate emissions accounting, supporting many climate-related rules and voluntary disclosure programs globally. By integrating perspectives from key frameworks such as CDP’s disclosure system, EFRAG’s European Sustainability Reporting Standards (ESRS), GRI’s global sustainability reporting guidelines, ISSB’s investor-focused climate standards, and SBTi’s target-setting criteria, the Protocol aims to reduce fragmentation and complexity for companies navigating a rapidly evolving disclosure landscape.

Alexander Bassen, ISB Chair, highlighted the material value for businesses in setting and achieving climate goals. "This alignment will generate material benefits for corporates looking to set and attain climate goals by making the process more streamlined across programmes," he said.

Each of the newly installed observers recognized the importance of the partnership and the possibility to build upon corporate climate action. Amir Sokolowski, CDP's Director of Climate, underscored the vital imperative to "connect environmental disclosure with sound accounting standards," which he defined as crucial for creating systemic change in the world economy.

Patrick de Cambourg, EFRAG Chair, reminded the EU entity of its reaffirmation for promoting consistency and comparability of GHG reporting, not only in Europe but globally. "Our engagement is intended to aid consistency and comparability of GHG reporting for the EU as well as on a global stage," he underscored, with reference to expanding interdependence among regional and worldwide reporting regimes.

Also, GRI Chief Standards Officer Bastian Buck commended the long-standing partnership of GRI and the GHG Protocol. He was optimistic about the continued synchronization of their respective frameworks to address the needs of stakeholders requiring clear, credible, and comparable data on emissions.

ISSB Vice-Chair Sue Lloyd emphasized the GHG Protocol's central role in their climate-disclosure standard, IFRS S2, that is becoming increasingly prominent as a leading investor-focused reporting framework. "The GHG Protocol is essential to the successful application of the ISSB's standards and continues to be relevant to investor-focused disclosures," she stated.

Alberto Carrillo Pineda, SBTi Chief Technical Officer, noted the value of the partnership in supporting the credibility of corporate climate targets. "This collaboration reinforces the pillars of credible climate target-setting and tracking," he noted, citing the importance of transparent emissions data to assess progress towards science-based goals.

The strategic alignment of these global participants into the ISB is commonly seen as an apt reaction to the growing need for consistency in climate disclosure norms. For most companies, reporting across several frameworks has resulted in reporting fatigue, duplication of efforts, and ambiguity regarding compliance expectations. This step is intended to tackle those problems directly by enhancing interoperability and minimizing complexity.

In addition, the progress sends a message to companies, investors, and regulators that initiatives to standardize climate reporting are taking hold. As climate change becomes the top agenda item for policymakers and corporate boards alike, having the capacity to measure and report emissions in a consistent and credible manner has never been more crucial. The integrated strategy led by the GHG Protocol and its new allies will hasten the pace of climate action while giving businesses a better map to guide them on compliance, transparency, and accountability.

As the GHG Protocol and its correlated frameworks keep changing, this upgraded coordination is set to become the foundation of the next generation of global climate reporting. For sustainability professionals, corporate leaders, and investors, it represents a seminal shift toward an integrated and better-functioning climate reporting system.