IFRS S2 Climate-related disclosures requires that an entity disclose its absolute gross greenhouse gas emissions generated during the reporting period, expressed as metric tonnes of CO₂ equivalent, and that these be measured “in accordance with the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (2004) unless the entity is required, in whole or in part, by a jurisdictional authority or an exchange on which it is listed to use a different method for measuring its greenhouse gas emissions.” The basis for conclusions states that the use of the GHG Protocol Corporate Standard provides common approaches and principles that allow an entity to prepare a greenhouse gas emissions inventory that faithfully represents its greenhouse gas emissions; align with the predominant corporate practices for compiling a greenhouse gas emissions inventory; and promote consistency and transparency in greenhouse gas emissions accounting and disclosure between various entities.

The Greenhouse Gas Protocol has recently been looking into revising its standards, carrying out a public consultation which apparently received nearly 1,100 responses from stakeholders across 56 countries. It reports: “Feedback reflected differing perspectives on how scope 2 reporting (which covers indirect greenhouse gas emissions from the generation of purchased and consumed electricity, steam, heat, and cooling) should balance integrity, impact, interoperability, and feasibility, including on proposed updates to both the location-based and market-based methods. Across the feedback, stakeholders emphasized the importance of improving accuracy, consistency, and credibility while also raising concerns related to implementation burden, regional data availability, assurance, and alignment with existing reporting requirements.”

Against that backdrop, The New York Times recently published an opinion piece by Michael Grunwald, titled The Latest Corporate Climate Ruse:

• … proposed revisions to the leading global standard for measuring and managing planet-warming emissions would make cutting down trees look good for the climate, as strange as it sounds. The changes to the widely used Greenhouse Gas Protocol would create a warped reality in which companies could claim credit for cutting emissions when they harvest trees for paper, burn trees for energy or convert trees into other wood products. And the more wood they use, the more emissions they could claim to reduce.
• There’s a simple explanation for these perverse results: The process to rewrite the rules has been dominated by wood products companies that would benefit, including the forestry giant Weyerhaeuser, the furniture giant IKEA and other foreign and domestic conglomerates. One of the few independent experts overseeing the process resigned in June to protest the excessive industry influence. Then last month the top land-use expert at the World Resources Institute, the environmental think tank whose management of the protocol has helped give it worldwide credibility, quit his job after his repeated warnings about greenwashing were ignored.
• …Revising (the protocol) to make deforestation look climate-friendly would encourage a lot more deforestation, make the companies responsible look like climate heroes and mislead consumers about the impact of forest products.
• This is why corporate influence over its revisions is so dangerous; just as companies would report much less taxable income if they could define what the I.R.S. counts as taxable income, companies will do much less to reduce their emissions if they can define what the protocol counts as emissions.

The article goes on to lay out further criticisms. But in some comments on its website, Greenhouse Gas Protocol suggested the adverse commentary is premature:

• Recent news articles have raised concerns about the scientific basis of potential forest carbon accounting approaches and whether industry interests have unduly influenced their development. These questions deserve a clear explanation of where the process stands, how decisions are made and what happens next.  
• Importantly, no forest carbon accounting (FCA) approach has been selected by Greenhouse Gas Protocol.  
• The full Independent Standards Board (ISB) considered two proposed approaches and didn’t approve either, and as a result, in July, we launched a public Request for Information to gather more evidence and perspectives on this important topic. The consultation period is open until February 1, 2027 and we encourage all interested stakeholders to participate. Responses will inform the ISB and Steering Committee’s decision on how to move forward. 
• … There are substantive disagreements within the scientific and practitioner communities about how human-caused emissions and removals from managed forests should be defined and accounted for.  This is part of the process, and our responsibility is to evaluate the evidence, understand the implications and be transparent about unresolved questions. 

The organization denies that any greater weight was given to industry perspectives, saying it commissioned an independent third party to review the process, finding “no evidence of bias or undue influence on ISB decision-making.”  Well, the cynical might say there’s still time for that to change. A big question: could things ever get to the point where IFRS S2 in its current form requires using a protocol that many key stakeholders view as being hopelessly compromised? Surely not…?

The opinions expressed are solely those of the author.