There have been a number of relevant initiatives developing methodologies and frameworks for corporate carbon reporting, and its use by the investment community.

The Greenhouse Gas (GHG) Protocol developed by the World Resources Institute and the WBCSD has achieved recognition as an international standard for reporting emissions. The core methodology has been further developed with specific initiatives improving the Scope 3 methodology (which includes emissions from product use) and reporting by specific sectors, including the financial sector. Read more...

The Carbon Disclosure Project (CDP) conducts annual surveys of climate change management, risks & opportunities, and emissions on behalf of 534 institutional investor signatories (with a combined $64 trillion in assets under management). The CDP requests Scopes 1,2 and 3 emissions data.  Over 2,000 companies responded to the Investor CDP questionnaire in 2010, including 84% of the Europe 300, 82% of the Global 500; 70% of the S&P 500 and 74% of the South Africa 100 companies. Read more...

The IIGCC, CERES and the IIGC have produced a Global Climate Disclosure Framework for the Oil & Gas sector, which has been integrated into CDP. This clearly expresses the demand from investors to know about carbon emissions through the lifecycle of fossil fuels, including during combustion of products. The paper notes that given 50% of an oil & gas company’s value is based on its reserves, “analysis of the prospective carbon liabilities associated with those future productive reserves is vital to understanding the extent of value at risk through climate and policy related change in coming years.” Read the pdf pdf1.1 MB

The Climate Institute in Australia has prepared Best Practice Methodology for managing climate change risk and opportunity in investment portfolios. This refers to the potential risk from fossil fuel reserves, stating ”there are currently sufficient proven fossil fuel reserves to comfortably exceed a 450ppm target, assuming existing technology trends. As such, there is strong argument that exploration assets may be the first to be devalued in the event of rapid regulation of emissions.”

In 2003, BP reported the greenhouse gas emissions that resulted from combustion of its products, which it calculated contributed 5% of the total world emissions. This can be found on p22 of its 2003 Sustainability Report. Read more... The figure was reported for a further two years but then dropped from the report. Shell acknowledged its products were responsible for 3.6% of global emissions in its 2004 Sustainability Report (p9). Read more... BP and Shell therefore demonstrated such reporting was possible years ago taking a leadership approach, but then took a backward step, not continuing to provide data on emissions relating to their products.