Appendix E — Roadmap Updates for 2025

Change in the Approach to Consolidating GHG Emissions

New section that discusses considerations related to the determination of whether a change in the approach to consolidating GHG emissions is justified, including the need to disclose such a change and the justification for making it.

Changes in Scope for Assets Out on Lease

New section that discusses the assessment of how a lessor would reflect GHG emissions related to assets that are not leased out for the entire reporting period.

New Example 7-7 added to illustrate how a lessor’s classification and reporting of GHG emissions related to assets that it does not lease out until later in the annual reporting period may vary depending on whether entering into the lease represents a significant structural change.

Double Counting of GHG Emissions From Leased Assets

New section that explains that two entities in a lessee-lessor relationship may report GHG emissions related to the same asset in the same scope if they apply different consolidation approaches for determining organizational boundaries.

New Example 7-8 added.

Updated the timeline graphic and narrative discussion to reflect that revisions to the GHG Protocol standards and related guidance (1) are expected to be issued in phases from 2025 through 2028, (2) are being developed by the GHG Protocol organization’s TWGs and are being overseen by its SC and ISB, and (3) are subject to approval by the ISB.

Updated the discussion of the current reporting landscape to reflect (1) the publication of a directive that postpones the application of some requirements under the European Union’s CSRD by certain entities, (2) the issuance and status of the SEC’s March 6, 2024, final rule on climate-related disclosures, and (3) the amendments in California’s SB-219.

Development of the GHG Protocol

Replaced Construction Ahead with a Changing Lanes that discusses (1) recent developments associated with updating the GHG Protocol standards and related guidance and (2) the GHG Protocol organization’s updated mission and vision statements.

Equity Share Approach

Expanded the discussion to explain how (1) a reporting company accounts for GHG emissions under the equity share approach on the basis of its economic interest in certain types of investees and (2) application of the equity method of accounting differs in presentation from application of the equity share approach.

Financial Control

Expanded Connecting the Dots to include discussion of (1) the definition of joint control to be used for sustainability reporting purposes and (2) additional considerations when the definition of joint control used for financial reporting purposes changes or when the reporting entity’s conclusion on whether it has joint control over another entity changes as a result of a change in facts and circumstances.

Amended the table in Example 2-2 by adding a footnote.

Operational Control

Expanded the discussion to (1) explain that operational control does not always coincide with equity ownership and (2) describe scenarios in which an entity may have operational control without equity ownership.

Amended the table in Example 2-3 by adding a footnote.

Comparison of Approaches

Amended the table in Example 2-4 by adding a footnote.

Concept of Double Counting

Expanded the discussion to explain, and added Example 3-2 to illustrate, that double counting of GHG emissions from a joint operation may be appropriate when the entities holding interests in the joint operation use different consolidation approaches to determine their respective organizational boundaries.

Choosing a Base Year

Expanded the discussion to include additional considerations related to the determination of a base year for Scope 3 emissions.

Structural Changes

Added new Example 4-2 to illustrate the interaction between an acquisition and a disposal in the assessment of structural changes that require recalculation of the base-year emissions.

Timing of Recalculation

Existing Example 4-2 renumbered to Example 4-3.

Discussion expanded to describe two approaches to recalculating GHG emissions when significant structural changes occur after the reporting period. New Example 4-4 added to illustrate the application of the two approaches.

Discovery of Errors That Are Individually Significant or Cumulative Errors That Are Collectively Significant

Discussion expanded to note that:

• Although a significant error is not specifically defined in the Corporate Standard, it may be considered to be the same as the Corporate Standard’s defined term “material discrepancy.”
• Any applicable sustainability standards outside of the GHG Protocol (e.g., IFRS Sustainability Disclosure Standards or ESRS) would also be considered in the evaluation of whether an error is material.

Existing Example 4-3 renumbered to Example 4-5.

Use of Offsets or Credits

Discussion expanded to include considerations related to the disclosure of carbon credits that are purchased and retired after the end of the reporting period but before issuance of the GHG report.

New Example 4-6 added to illustrate a situation in which it may be appropriate for an entity to apply carbon offsets purchased and retired after the end of a reporting period against GHG emissions produced in that period.

Apply Calculation Tools

Added a discussion of the three most common approaches to calculating GHG emissions from fuel combustion.

Optional Reporting

Expanded the discussion of optional disclosures about the voluntary use of carbon offsets and credits to include considerations related to the use of a framework to support the credibility of such offsets and credits.

Lessee Accounting for Emissions From Leased Assets

Discussion expanded to (1) note that there is an implicit presumption in the GHG Protocol that a lessee has operational control over an asset subject to an operating lease and (2) explain how the reporting entity would assess whether the presumption can be rebutted.