As in financial reporting, carbon accounting also requires some structure. Accounting principles are here to guide companies into their GHG accounting and reporting in order to ensure transparency and faithfulness of the reported information.
There are 5 principles and companies should apply all of them when accounting and reporting their GHG emissions.
Relevance: Ensure the GHG inventory appropriately reflects the emissions of the company and serves the decision-making needs of users – both internal and external to the company.
Completeness: Account for and report on all emission sources and activities within the chosen inventory boundary. Disclose and justify any specific exclusions.
Consistency: Use consistent methodologies to allow for meaningful comparisons of emissions over time. Transparently document any changes to the data, inventory boundary, methods, or any other relevant factors in the time series.
Transparency: Address all relevant issues in a factual and coherent manner, based on a clear audit trail. Disclose any relevant assumptions and make appropriate references to the accounting and calculation methodologies and data sources used.
Accuracy: Ensure that the quantification of emissions is systematically neither over nor under actual emissions, as far as can be judged, and that uncertainties are reduced as far as practicable. Achieve sufficient accuracy to enable users to make decisions with reasonable assurance as to the integrity of the reported information.
When the application of the standards of the GHG Protocol Corporate Standard is ambiguous, companies shall use these principles for decision taking.