3.3 Double Counting Within the Value Chain

According to the Corporate Standard’s glossary, double counting occurs when “[t]wo or more reporting companies take ownership of the same emissions or reductions.” Further, in a company’s emission disclosures, Scope 1 emissions would not be included within Scope 2 or Scope 3. Classifying emissions along a company’s value chain into the proper scope (Scope 1, Scope 2, or Scope 3) can prevent double counting as long as the entities reporting the specific emissions are applying the same consolidation approach. For example, Scope 2 would exclude emissions from electricity purchased for resale since those emissions are classified as Scope 3. For considerations related to the double counting of Scope 3 emissions, see Section 6.6.

While the Corporate Standard encourages entities to report in such a way that double counting of GHG emissions is avoided, it does not require entities within the same value chain to use the same approach to determine their respective organizational boundaries (see Chapter 2 for a discussion of the equity share approach, the financial control approach, and the operational control approach), recognizing that “[w]hen two or more companies hold interests in the same joint operation and use different consolidation approaches . . . , emissions from that joint operation could be double counted.” In this scenario, it would not be appropriate for the reporting entities to remove GHG emissions from their reporting to avoid double counting (i.e., two or more reporting entities reporting the same GHG emissions as either Scope 1 or Scope 2 emissions).

In addition to the GHG Protocol, an entity would also need to consider the sustainability standards, if applicable, under which the GHG emissions will be reported (e.g., IFRS Sustainability Disclosure Standards or ESRS) for specific requirements on the need to avoid double counting.