Carbon Measures, a new carbon accounting initiative, will establish an independent guiding panel.
The initiative is supported by several major energy and multinational corporations, according to Carbon Measures’ chief executive who was quoted in a Reuters report.
The global group, recently launched by 19 prominent founder members including industry giants like ExxonMobil, BASF, and Banco Santander, is embarking on a crucial mission to revolutionise how companies account for their carbon emissions.
A primary objective of this initiative is to establish a standardised and universally accepted carbon emissions accounting system.
This system is designed to address the pervasive issue of double-counting of emissions, a common challenge that has historically hampered accurate reporting and hindered effective climate action.
Establishing a standardised system
Beyond mere accuracy, the group aims to create a framework that actively rewards companies for their efforts in becoming more sustainable.
By providing a clear and verifiable mechanism to recognise and incentivise sustainable practices, the initiative seeks to accelerate the pace of climate action across various sectors.
While existing carbon accounting guidance, such as that developed by the Greenhouse Gas Protocol, provides valuable frameworks, comparing carbon emissions and efforts across different companies remains a significant challenge.
This difficulty arises from various factors, including the flexibility in reporting boundaries, differing methodologies for calculating emissions, and the voluntary nature of current disclosures.
Addressing inconsistencies
To address these inconsistencies and foster greater transparency and comparability, Carbon Measures is developing an innovative ledger-based system.
This system is designed to mirror the rigorous and standardized approach employed in financial accounting, where clear rules and verifiable transactions ensure consistent reporting.
The ambitious goal is to have this system ready for adoption by countries within the next two years.
“The organisations that are investing ahead are not necessarily getting rewarded for it,” Carbon Measures’ CEO Amy Brachio was quoted in the report.
So if industries have to move as a whole; if markets have to move as a whole, then there’s a level playing field that provides the incentive for investing in innovation.
Brachio previously held the position of global vice chair of sustainability at EY, a consulting firm, before becoming CEO.
Leadership and collaboration
In collaboration with the International Chamber of Commerce (ICC), Carbon Measures will establish an independent panel.
This panel, comprised of experts from academia, accounting, industry, and civil society, will be instrumental in designing the global accounting system.
Andrew Wilson, the ICC’s deputy secretary-general, highlighted the need for a standardised accounting method to accelerate action a decade after the Paris Agreement.
He described the initiative as a potential “game changer” but stressed that it “can’t just be a talking shop, it has to deliver.”
Brachio and Karthik Ramanna will co-chair the panel of independent experts.
Ramanna is a professor of Business and Public Policy and director of the Transformational Leadership Fellowship at the University of Oxford in England.
Ramanna drew a parallel between this initiative and the establishment of the Generally Accepted Accounting Principles nine decades prior.
If done right, these principles can bring to bear the full power of capitalism to accelerate decarbonisation while driving energy abundance.
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