A commentary comparing the GHG Protocol and E-liability approaches to corporate GHG accounting and reporting

Abstract

E-liability is a GHG data management approach that has been proposed as an alternative to the GHG Protocol corporate standards, already widely adopted by businesses and voluntary and regulatory programs. E-liability resembles the GHG Protocol in its methods for calculating and allocating emissions from suppliers. But while the GHG Protocol takes a cradle-to-grave approach to corporate inventories, E-liability focuses narrowly on cradle-to-gate and direct emissions. Leaving out information on downstream emissions could misinform GHG management decisions, limiting E-liability’s usefulness for comprehensive corporate GHG management, target setting, risk assessments and disclosures. The E-liability approach offloads emission liabilities to downstream customers potentially leaving them responsible for the burden of managing them. E-liability aims to deliver mutually exclusive emissions data so that organizations do not multi-count emissions across value chains. But whether multi-counting matters depends on the goal: whether it is to produce a mutually exclusive corporate GHG liabilities report, or to strategically manage and reduce emissions across value chains. E-liability’s use of primary data and mutually exclusive emissions accounting could improve data quality and support carbon pricing and tariffs. However, implementing E-liability would require broad adoption and that would likely depend on having an expansive regulatory regime that does not exist. The GHG Protocol that E-liability proponents seek to replace can function in both a voluntary and regulatory system. It also already provides all the emission building blocks needed to support an E-liability approach, including scope 1, scope 2 and the upstream part of scope 3 emissions.

Keywords

• GHG Protocol
• E-liability
• corporate GHG accounting
• scope 1, 2, and 3
• greenhouse gas emissions