Which carbon accounting methodology to choose?

During the 2000s, various calculation methods were developed to account for a company's greenhouse gas (GHG) emissions. This is what is commonly called carbon accounting. In this article we have chosen to focus on the main reference systems used: GHG Protocol, BEGES and Bilan Carbone. Despite their particularities, they are all compatible with the ISO standard of reference on the subject, the ISO 14064 standard.

L'ISO 14064 is a voluntary global standard that provides guidelines for measuring greenhouse gas (GHG) emissions in organizations. Published in 2006, its aim is to integrate with other energy and environmental standards. All the methods mentioned below are therefore in line with this standard.

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Understand the major carbon accounting standards.

➡️ GHG Protocol

The GHG Protocol or "Greenhouse Gas Protocol Corporate Accounting and Reporting Standard" is a methodology created in 1998 and now widely adopted internationally. This methodology is used as a reference by leading initiatives such as the SBTi and in numerous legislations around the world, such as the European Union's Corporate Sustainability Reporting Directive (CSRD).

The GHG Protocol defines 3 scopes categorizing a company's carbon emissions. Only the accounting of scope 1, related to direct emissions, and scope 2, related to indirect emissions due to energy use, is mandatory within the framework of the methodology.

However, the methodology strongly recommends that Scope 3 emissions be included, which cover all emissions generated by a company's upstream and downstream value chain: raw material purchases, transportation, product use, waste, etc.

➡️ GRI 305

The Global Reporting Initiative or GRI, is an independent organization that has developed several standards related to ESG criteria (Environment, Social and Governance).

The GRI 305 standard covers the entirety of a company's emissions. The GRI 305 GHG accounting recommendations are fully consistent with the GHG Protocol methodology. Thus, the GRI 305 carbon accounting methodology is equivalent to the GHG Protocol.

➡️ BEGES

The BEGES or Greenhouse Gas Emissions Assessment is a mandatory exercise for all companies present on French soil with more than 500 employees in metropolitan France and 250 employees in the overseas departments and regions.

All direct emissions (scope 1), indirect energy-related emissions (scope 2) and all significant indirect emissions (scope 3) must be accounted for in the BEGES methodology. The BEGES methodology is now in its 5th regulatory version, the latest changes to which were made mandatory in January 2023. To find out more, read our article on the subject here.

Significant indirect emissions include indirect emissions associated with energy, transportation and products purchased and sold. These significant indirect emissions are defined after having carried out a BEGES as exhaustive as possible.

➡️ Bilan carbone®

Created by ADEME in 2004, the Bilan Carbone is, in France, the historical methodological standard for quantifying GHG emissions.

Since 2011, the Association for Low Carbon Transition (ABC), co-founded by ADEME and APCC (Association of Climate, Energy and Environment Consulting Professionals), has been promoting and distributing the Bilan Carbone® brand and methodology.

Today, this methodology is widely used and followed by French companies. Its dissemination has notably allowed the democratization of carbon accounting and the concept of corporate carbon footprints.

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What is the difference between carbon accounting standards?

Despite a certain apparent homogeneity between the various standards and norms, there are nevertheless notable differences in methodologies, scope and actionability.

Differences on carbon accounting.

The calculation methods and the perimeters taken into account by the existing standards differ on certain points, and in particular

the carbon footprint of visitor or customer travel is not taken into account in the GHG Protocol,
depreciation is generally treated as a "fleet" in the BEGES and as a "flow" in the GHG Protocol,
Biomass is taken into account differently depending on the methodologies,
investments are not taken into account in the Bilan Carbone®, unlike the BEGES and the GHG Protocol,
deductibles no longer exist as a separate item in the BEGES.

Another major difference between the standards concerns scope 3. Indeed, the GHG Protocol does not require companies to carry out a carbon footprint of upstream and downstream indirect emissions, unlike the BEGES and the Bilan Carbone®. In fact, the majority of companies following the GHG Protocol framework still carry out a carbon footprint on their scope 3, in particular in order tobe certified SBTi (Science Based Target initiative).

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Differences in expected carbon accounting related data.

Finally, these methodologies also require or recommend certain additional information beyond simple emissions accounting , which also varies.

For example, it is mandatory to provide information on the uncertainties related to the emission items in the framework of a Bilan Carbone®, which is only optional in the framework of a BEGES or a GHG Protocol reporting.

On the other hand, the transition plan required by the BEGES, composed of the assessment of past actions, medium and long term objectives, an action plan and expected volumes of reductions, is not required by the other methodologies, although the Bilan Carbone® and the GHG Protocol recommend to carry out an assessment of its past actions

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Finally, how do you choose the right carbon methodology for your company?

On the whole, the 3 methodological standards described here are broadly similar, equally valid and, if followed rigorously, ensure accurate, actionable carbon accounting. Measuring GHG emissions is not an end in itself. A company's carbon footprint, on the other hand, is a prerequisite for taking concrete action.

Whether you want to carry out your first carbon footprint measurement or set up a regular carbon measurement, it is important to set high standards for the quality of your carbon accounting from the outset, otherwise you will not obtain an account that can be used to truly decarbonise your company.

Carbon measurement is intended to be a recurring exercise, allowing us to see our efforts over time and to maintain a good reduction trajectory. Companies that are slow to perform serious carbon accounting of their activities are falling behind in the future low-carbon transition, which no organization will escape. In any case, serious carbon accounting will require the same level of investment regardless of the methodology chosen.

The challenge for companies today is therefore more to commit to regular carbon measurement and, above all, to the actual deployment of reduction actions, than to choose between 3 serious methodological standards. That said, in order to choose the methodology best suited to your organization, it is important to consider the regulatory framework in which it operates.

If you want to commit your company to a serious low-carbon transition, make an appointment with our team to find out how Traace's carbon footprint platform can bring you the highest level of quality on your carbon accounting and enable you to effectively pilot your climate action plan.‍

➡️ Book a meeting

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