The founder of Generation Investment Management and chair of the Grantham Research Institute on Climate Change are among those fighting back against a new initiative to redesign carbon accounting rules.
David Blood and Nicholas Stern are two of eight big names to sign a statement on Friday levelled at a plan to develop an alternative to the GHG Protocol, which could do away with the need to disclose Scope 3 emissions.
The plan has been spearheaded by the International Chamber of Commerce (ICC) and Carbon Measures, a new initiative backed by corporates including ExxonMobil, BASF and Bayer.
Launched ahead of last year’s COP30 climate summit, the proposal is based on a long-standing concept developed by academics at Oxford and Harvard Universities.
It seeks to establish a ‘ledger-based’ accounting system in which, when an asset is transferred from one company to another, its carbon footprint goes with it.
Such a regime will reduce ‘double counting’ – when multiple entities take responsibility for the same tonne of carbon because it shows up in multiple value chains – and hold buyers liable for emissions rather than sellers.
This is different from current practice, as defined by the GHG Protocol, which requires entities to account for the emissions generated by using their products and services via ‘Scope 3’ disclosures.
The GHG Protocol is currently working with the International Standards Organisation (ISO) on product-level carbon accounting.
In Friday’s statement, the signatories called on Carbon Measures to contribute to the ISO-GHG Protocol project, instead of creating an alternative proposal, and urged investors and other stakeholders to also “build on the current system”.
“Fragmentation into parallel accounting systems would increase costs, reduce comparability and weaken investor confidence,” it argued.
“This would inevitably slow down and increase the costs of the transition.”
The signatories also include Mindy Lubber, the chief executive officer of US shareholder network Ceres, and Paul Polman, the former CEO of Unilever.
“Full value-chain visibility – including Scope 3 emissions both upstream and downstream, enabled by a strong corporate carbon accounting standard – is essential for credible transition planning, investors’ fiduciary duty, and forward-looking assessments of climate risk,” the statement continued.
“Calls to place product accounting at the centre of carbon accounting risk narrowing the frame to individual products and obscuring the system-level impacts and levers that matter most for companies and investors.”
The statement was issued the same week Carbon Measures and the ICC appointed the first round of members to its new Expert Panel on Carbon Accounting.
They include representatives from Banco Santander, Singapore’s Private Family Office, Tata Steel, Microsoft, Bayer, and Mitsui & Co. Another set of members will be decided in coming weeks.
