2.5 Change in the Approach to Consolidating GHG Emissions

A change in the approach to consolidating GHG emissions may result in a change to inventory and reporting boundaries. Accordingly, an entity may change its approach to consolidating GHG emissions if the new approach would be “best suited to [its] business activities and GHG accounting and reporting requirements,” as stated in the Corporate Standard.

Judgment is required to determine whether a change in the approach to consolidating GHG emissions is justified. Among other considerations, an entity would need to consider the GHG accounting and reporting principles to determine whether the change in approach is justified. For instance, it would be inappropriate to change the approach simply to avoid reporting emissions. If there is a change in facts and circumstances necessitating a change in the approach, an entity would need to apply judgment when considering the seven factors included in the Corporate Standard (see Section 2.4) for determining the appropriate approach. In addition, an entity would need to consider other regulatory requirements that may preclude it from changing its approach or limit the circumstances in which such a change is permitted.

If a change in the approach to consolidating GHG emissions is justified, the entity would need to disclose this change along with the rationale for the change to meet the objectives of the Corporate Standard’s consistency principle.

Further, upon making such a change, the entity would need to reconsider its emission inventory and changes to its operational boundary resulting from the change in its organizational boundary. If changes in the approach to consolidating GHG emissions compromise the consistency and relevance of the reported GHG emission information, the historical periods (e.g., base year) would need to be restated.