In addition to certain regional or national regulations, the Paris Agreement has also affected the private sector. In particular, it has led to methodological approaches to help companies reduce their carbon footprint.
Two major standards now serve as benchmarks: the SBTi (Science-Based Target Initiative) and the GHG Protocol (Greenhouse Gas Protocol).
What are these great standards?
The GHG Protocol for carbon accounting
The Greenhouse Gas (GHG) Protocol is the international standard that dictates the rules for carbon accounting. It allows companies to establish their carbon footprint, which corresponds to the accounting of GHG flows generated by their economic activities. It was initiated by the World Business Council for Sustainable Development (WBCSD) and the World Resources Institute (WRI).
The term "balance sheet" is used by analogy to the accounting balance sheet, which summarises a company's financial situation.
The carbon footprint aims to inventory a company's greenhouse gas emissions across its entire value chain.
When establishing a carbon footprint, the first step is to define its reporting scope. This scope is not limited to emissions for which the company is responsible due to its economic activity. It also extends to emissions on which the company depends. The GHG allows activities to be divided into 3 Scopes which define the company's value chain.
GHG Protocol – Land Sector and Removals Guidance: what's new
SBTi for decarbonisation strategy
The Science Based Targets initiative (SBTi) is the international standard that allows companies to align their decarbonisation strategy with the Paris Agreement. It is supported by a partnership between CDP, the United Nations Global Compact, the World Resources Institute (WRI) and the World Wide Fund for Nature (WWF).
The SBTi is for companies of all sectors as well as financial institutions.
Company objectives, recognised and aligned with science (Science-Based), must necessarily be built from carbon assessments that adhere to the accounting rules established by the GHG Protocol.
SBTI FLAG: what are the consequences for the decarbonisation of businesses?
The GHG Protocol and the SBTi therefore work in a complementary way. They rely on each other to provide a framework for companies wishing to decarbonise their activities.
These international reference frameworks are not mandatory but are the benchmark for the majority of large companies that use them. They also tend to influence legislation, particularly European legislation.
Sector-specific land methodologies
These two frameworks have recently evolved to better guide the decarbonisation of the AFOLU (Agriculture, Forestry, and Other Land Use) sector.
With these new standards, all emissions related to land use are taken into account, as well as carbon sequestration.
The SBTi-FLAG guide was published in September 2022. Its aim is to enable the companies concerned to reduce their FLAG emissions by 30.31% by 2030.
The GHG Protocol also published a preliminary version in September 2022. This is a carbon accounting framework specific to land use and management.
The SBTi – FLAG guidance is based on the GHG Protocol – Land Sector and Removals for the calculation of SBTi – FLAG targets.
The final version of the GHG Protocol – Land Sector and Removals is expected by the end of 2023.
GHG Protocol – Land Sector and Removals Guidance: what's new
SBTI FLAG: what are the consequences for the decarbonisation of businesses?
Sources
Greenhouse Gas Protocol Land Sector and Removals Guidance (Draft for Pilot Testing and Review, September 2022). Accessible here: https://ghgprotocol.org/land-sector-and-removals-guidance
FOREST, LAND AND AGRICULTURE SCIENCE BASED TARGET-SETTING GUIDANCE, October 2022, Accessible here: https://sciencebasedtargets.org/sectors/forest-land-and-agriculture
SBTi FOREST, LAND AND AGRICULTURE (FLAG) PROJECT FAQs, November 2023. Accessible here: https://sciencebasedtargets.org/resources/files/FLAG-FAQ.pdf
Understanding the new SBTi FLAG – Land Sector standard, Deloitte, November 2022. Accessible here: https://www2.deloitte.com/content/dam/Deloitte/fr/Documents/sustainability-services/deloitte_article-SBTi-partie2-comprendre-referenciel-SBTi.pdf
From compensation to contribution, Sweep. Accessible here: https://www2.sweep.net/comment-faire-des-credits-carbone-un-avantage-competitif-pour-votre-strategie-climatique
How to highlight and communicate on climate action carried out within the framework of the Low-Carbon Label?, I4CE – Institute for climate economics, November 2021. Accessible here: https://www.i4ce.org/publication/action-climatique-label-bas-carbone-climat/
Insetting and Scope 3 climate action: applying and accounting for Natural Climate Solutions (NCS) in land sector value chains, WBSCD, September 2022. Accessible here: https://www.wbcsd.org/contentwbc/download/14797/210459/1
Baptiste Soenen, Morgane Henaff, Hélène Lagrange, Edouard Lanckriet, Anne Schneider, Remy Duval, Jean-Louis Streibig, 2021. Low Carbon Label Method for Arable Crops (version 1.0). Accessible here: https://www.ecologie.gouv.fr/label-bas-carbone
