ISO 14064-1 and GHG Protocol are both commonly used basis for enterprises to conduct organizational greenhouse gas inventory. The two are not mutually exclusive solutions, but rather interrogation structures built from different backgrounds. What most companies really need to solve is not to choose one of the two, but how to establish a set of information that simultaneously meets verification, customer and disclosure requirements.
Core differences
| Comparison Orientation | ISO 14064-1 | GHG Protocol |
|---|---|---|
| Main positioning | Quantification and reporting standards for emissions and removal at the organizational level | Enterprise greenhouse gas inventory and reporting standard system |
| Common classifications | Direct emissions, indirect emissions from input energy and other indirect emission categories | Scope 1, Scope 2, Scope 3 |
| Common uses | Organizational inspections, third-party verification, management systems | International disclosure, customer questionnaires, goal setting and value chain management |
| Scope 2 | Quantifying indirect energy emissions based on the method used by the organization | Also Scope 2 Guidance and location/market based methods |
| Scope 3 | Determine the scope of indirect emissions based on significance | Scope 3 Standard provides 15 types of value chain classification |
Different classification names do not mean different emission sources.
The same boiler fuel, purchased electricity or raw material procurement information may use different names in the two structures, but the emission activity itself does not change. When establishing a database, emission sources, activity data and calculation basis should be retained, and then output in different formats through comparison rules to avoid repeated reporting.
Which set is more suitable for verification?
Whether it can be verified depends on the verification plan, customer requirements and verification agency arrangements, rather than just looking at the name. ISO 14064-1 is often used as a basis for organizational audits and verification; GHG Protocol is also widely used for corporate disclosure. Enterprises should first confirm the intended users and delivery requirements.
Which set is more suitable for Scope 3?
GHG Protocol’s Scope 3 Standard provides 15 categories and value chain boundaries, which is very helpful for supply chain emissions management. ISO 14064-1 requires organizations to establish indirect emission identification and materiality criteria. In practice, GHG Protocol classification can be used to assist in identification, and then the boundaries and reasons for exclusion can be explained in accordance with the ISO 14064-1 reporting principles.
What do you suggest companies do?
- First confirm the regulations, customers, disclosure and verification purposes.
- Establish a single organizational boundary and emission source inventory.
- Set ISO category and Scope comparison for each piece of data.
- Unify activity data, coefficients, attachments and review processes.
- Output reports according to different requirements instead of maintaining two sets of original data.
If an enterprise is facing ISO verification, IFRS S2, CDP or SBTi at the same time, parallel design is usually more suitable. What really affects the quality is whether the boundaries are consistent, whether the data can be traced and whether the differences are clearly explained.
Before comparing, first confirm what problem the company wants to solve.
Different systems may seem to use similar terms, but in fact they may serve regulatory compliance, information disclosure, verification, transactions or internal decision-making respectively. When choosing, you should not just ask which one is easier, but first confirm the external requirements, intended users, delivery period and whether verification is needed in the future.
It is recommended to use five judgment aspects
- Applicable objects: manage organizations, products, projects, supply chains or specific markets.
- Primary purpose: Quantification, disclosure, verification, regulatory compliance, or decision-making.
- Profile Boundary: Which companies, locations, life cycle or value chain activities are covered.
- Deliverables: Reports, statements, certificates, scores, declarations, or internal analyses.
- Ongoing Accountability: Whether annual updates, revalidations, tracking targets, or evidence preservation are required.
Do not create a separate set of profiles for each requirement
Enterprises should first establish a common organization, products, suppliers, activity data, attachments and audit basis, and then establish classification and output rules according to different systems. If each project collects data independently, multiple versions will easily appear during the same period, and the organizer will not be able to explain the differences.
Which situations require simultaneous use?
When regulatory, customer and disclosure requirements each specify different bases, companies may need to do so in parallel. At this time, a comparison table should be established to describe common data, unique requirements, boundary differences, and output formats, rather than requiring each department to fill it out repeatedly.
Common selection errors
- Thinking that the content can replace each other just because the names are similar.
- Compare only the number of clauses, ignoring customer or regulatory requirements.
- Choose tools first, then look back for management purposes.
- No assessment of data maturity and maintenance costs.
- Treat passing verification as the only indicator of system completion.
Self-check before making decisions
- Which one is a clear external requirement, and which one is an enterprise’s own choice?
- Is third-party verification, evaluation or reporting by the competent authority required?
- Can existing data support the required bounds and precision?
- Can the two systems share data and processes?
- Will there still be maintenance and update resources in the next three years?
There is not necessarily just one most suitable solution. If companies can establish a common underlying data, they can combine standards and tools for different purposes without having to start from scratch every time.
When companies choose a method, it is recommended to confirm four things in order
Start by identifying external requirements. Whether clients, authorities, parent companies, investors or verification agencies specify specific standards will directly affect the methods that can be used. If there is no mandatory designation, go back and evaluate the management problem that the company really wants to solve to avoid choosing the wrong tool because of similar names.
Next, confirm the management objects and boundaries. Some approaches focus on the entire organization, while others focus on products, value chains, projects, or specific disclosure situations. Depending on the boundaries, the required data, responsible units, and results usage will all change. When comparing, “what is counted, where it is calculated, and who uses the results” should be put on the same table, rather than just comparing the number of articles.
The third is to check the maturity of the data and resources. If an enterprise has not established basic inventory and data management and directly introduces more demanding methods, it may result in a lot of estimation and rework. You can complete the common foundation first, and then gradually increase the sophistication according to market demand. If multiple frameworks have common data, a design should be adopted to collect it once and output it in multiple ways.
Finally, consider verification and future expansion. A company may only need internal management now, but may face customer audits, public disclosures or third-party assurances in the future. Keeping records of sources, versions, assumptions, and approvals from the outset is much easier than reconstructing evidence afterward.
After comparing, how to make a choice that suits you?
Businesses don’t necessarily have to choose one or the other. If the two methods serve different purposes, a common data base can be established and corresponding results can be produced separately; if the two methods are highly overlapping, a set of main governance rules should be selected to avoid departments maintaining different versions. When making decisions, the five conditions of “necessity, data availability, implementation cost, external acceptance, and future scalability” can be used to evaluate, and the reasons for the choice should be recorded.
For companies that are in contact for the first time, the most important thing is not to adopt the most frameworks immediately, but to establish clear boundaries and traceable information first. When the common foundation is stable, adding new disclosure or verification requirements is usually just an adjustment to the output method; on the other hand, if the underlying data is confusing, even the most complete method will not be able to produce credible results.