Decarbonization pathway and relevant standards: What you need to know about GHG Protocol, ISO 14064, SBTi
“Net- Zero”: Opportunities and challenges are interconnected and must be considered together.
At COP26 in 2021, Vietnam Prime Minister Pham Minh Chinh pledged that Vietnam would achieve Net Zero carbon emissions by 2050. Following that, the Government has launched a series of projects and action plans to carry out this commitment. For example, they have put in place regulations to mandate greenhouse gas inventories for businesses with significant emissions. Additionally, they have plans to develop the domestic carbon market through the establishment and refinement of policies and mechanisms for carbon credits. The government also aims to pilot the implementation until 2027, and officially launch the carbon credit exchange from 2028.
Preparing for a sustainable development roadmap, particularly aiming for Net-zero, has received a lot of attention from businesses recently. Many companies have proactively started implementing it early to cut greenhouse gas emissions and move towards net zero emissions. This not only enhances their reputation with stakeholders but also promotes innovation and competitiveness, minimizes financial risks related to climate change issues, and ensures sustainable growth in the future. However, the green transition process is also a long road with many obstacles and challenges. Some common challenges include high investment costs, lack of human resources with expertise in greenhouse gas emissions reduction and net-zero strategies, lack of awareness of stakeholders, and reluctance to change.
One of the biggest challenges is related to calculating greenhouse gas, which is crucial to achieving net zero emissions. Currently, many businesses remain unfamiliar with greenhouse gas inventories. Therefore, calculation methods are applied inconsistently, and Scope 3 emissions (all other indirect emissions occurring in the enterprise's value chain) are almost under-measured. Even if they are measured, explaining and incorporating these results into the enterprise’s strategies and operations is still challenging.
GHG Protocol and ISO 14064
The GHG Protocol and the ISO 14064 series are two widely used standards for measuring and reporting greenhouse gas emissions.
The GHG Protocol was developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). It provides guidance and tools that help companies, organizations, and governments in measuring and managing their greenhouse gas emissions. The GHG Protocol also offers industry-specific guidelines, calculation methods, and reporting frameworks for different types of organizations and operations.
The ISO 14064 series, on the other hand, is a set of international standards developed by the International Organization for Standardization (ISO) to help organizations quantify, monitor, report, and verify greenhouse gas emissions. The ISO 14064 standards consist of three parts: part 1 provides guidance at the organizational level, part 2 provides guidance at the project level, and part 3 provides guidance on requirements and validation and verification processes. The ISO 14064 series is compatible with other ISO standards, such as ISO 14001 on environmental management systems.
Table: Summary of similarities and differences between the two standards GHG Protocol and ISO 14064
| GHG Protocol | ISO 14064 | ||
| Similarity | Both the GHG Protocol and the ISO 14064 series are based on basic principles such as relevance, completeness, consistency, transparency, and accuracy. These principles ensure that the methods used to measure and report greenhouse gas emissions are reliable and standardized. Both standards use the same Global Warming Potential (GWP) to convert different greenhouse gases into CO2 equivalent units. This helps to compare and aggregate emissions from different sources and sectors. Moreover, both standards allow for flexibility and adaptation to the specific context and goals of each organization or project. They encourage continuous improvement and stakeholder engagement, which is important for achieving sustainability goals. | ||
| Different | Classification of emission sources at the organizational level | The GHG Protocol divides greenhouse gas emissions into three scopes: Scope 1 (Emissions from operations that are owned or controlled by the reporting company), similar to Category 1 of ISO 14064-1. Scope 2 (Emissions from the generation of purchased or acquired electricity, steam, heating, or cooling consumed by the reporting company), is similar to Category 2 of ISO 14064-1. Scope 3 (all other indirect emissions that occur in the value chain of the reporting company, including both upstream and downstream emissions). Scope 3 of the GHG Protocol covers Category 3,4,5,6 of ISO 14064-1. | At the organizational level, the ISO 14064-1 standard classifies greenhouse gas emissions into six categories: Category 1- Direct GHG emissions and removals Category 2 – Indirect GHG emissions from imported energy Category 3 – Indirect GHG emissions from transportation Category 4 – Indirect GHG emissions from products used by the organization Category 5 – Indirect GHG emissions associated with the use of products from the organization Category 6 – Indirect GHG emissions from other sources. |
| Scope and application | The GHG Protocol is more comprehensive and detailed, covering more sectors and activities and providing more guidance and tools for GHG calculation and management | ISO 14064 has a more general and concise approach to GHG quantification, monitoring, reporting, and verification. It provides specifications and requirements with ample room for interpretation and adaptation. | |
| Acceptance | The GHG Protocol is widely referenced and used by both voluntary and mandatory GHG reporting programs, initiatives, and platforms, including the Carbon Disclosure Project (CDP), Global Reporting Initiative (GRI), and the Science-Based Targets Initiative (SBTi). | ISO 14064 is widely recognized and accepted by various regulatory and accreditation bodies, including the United Nations Framework Convention on Climate Change (UNFCCC), the Clean Development Mechanism (CDM), and the Verified Carbon Standard (VCS). | |
Despite differences in their approach and classification of emissions, both GHG Protocol and ISO 14064 offer valuable frameworks for calculating and managing greenhouse gases. When selecting standards for calculating and managing greenhouse gases, it is essential to consider factors such as purpose, scope, target audience, and resources. The two standards are compatible and complementary. Companies and organizations can use the GHG Protocol to calculate and manage greenhouse gas emissions and then utilize ISO 14064 for reporting and verification.
Science Based Targets Initiative (SBTi) – a roadmap towards Net-zero
The Science-Based Targets Initiative (SBTi) is now considered the gold standard for companies looking to develop a clear pathway for emissions reduction. It is the result of collaboration between the CDP Carbon Disclosure Project, the United Nations Global Compact (UNGC), the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF). SBTi assists companies in setting clear and specific targets for reducing greenhouse gas emissions to prevent the worst impacts of climate change on society, the economy, and the planet. These targets are science-based, which is consistent with the Paris Agreement's goal of limiting global warming to 1.5°C - 2°C above pre-industrial levels. To achieve this, short-term actions and long-term strategies are required to halve greenhouse gas emissions by 2030 and reach net-zero emissions by 2050.
In simpler terms, SBTi bridges the Paris Climate Agreement and tangible measures to help control global warming. It is also a key channel for leading businesses to turn their climate change ambitions into actual actions. As of October 2023, 6,326 businesses have committed to emissions reduction targets with guidance from SBTi, with 3,611 of these targets already approved. Many large corporations, such as Adidas, AirFrance, Apple, PepsiCo, LVMH, Nike, Nestlé, and others, have pioneered a sustainable future by committing to SBTi.
Bureau Veritas Greenhouse Gas Inventory and SBTi Services
At Bureau Veritas, we provide comprehensive support and expertise to assist companies in conducting accurate and reliable greenhouse gas inventories and establishing Science-based Based Targets (SBTi) that align with their green transition strategy. Our team works closely with businesses from the initial stage of submitting the commitment letter until SBTi validates their targets. We also accompany our customers in the next stage of reporting on annual progress. Our specific services include:
- Energy audit and consulting: We provide comprehensive energy audit and consulting services, including measuring, collecting, and analyzing data on energy consumption, determining the level of energy efficiency of production processes, identifying the causes of high energy consumption, proposing improvement and corrective actions, and more.
- Greenhouse gas inventory: We offer training and calculating services to help companies identify emission sources, collect data, and calculate greenhouse gas emissions. We also verify calculation results to ensure accuracy and reliability.
- Support businesses in setting SBTi targets: Our team assists companies in submitting the commitment letter and establishing a roadmap to achieve short-term targets and long-term net zero emissions targets. We propose options and strategies to achieve the targets and support businesses in the target validation process.
Table. SBTi's short-term and long-term net zero targets in a normal route*
| Scope 1 & 2 | Scope 3 | ||
| Short-term target | Target boundary | 95% coverage of Scope 1 & 2 | If Scope 3 is more than 40% of total emissions: the target needs to cover at least 67% of Scope 3 |
| Target year | 5-10 years from the date of submission | 5-10 years from the date of submission | |
| Target temperature | 1.5°C ambition | Well-below 2°C ambition | |
| Long-term goal and net zero target | Target boundary | 95% coverage of Scope 1 & 2 | 90% coverage of scope 3 |
| Target year | 2050 or earlier | 2050 or earlier | |
| Target temperature | 1.5°C ambition | 1.5°C ambition |
*(for small and medium enterprises, another SME route will be applied)
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