Guide to voluntary sustainability frameworks

Summary

Did you know that certain voluntary sustainability frameworks for reporting can deliver great benefits and advantages to your organisation if you begin to follow them?

This article provides a helpful summary of the voluntary sustainability frameworks that are currently available, how to comply, and the advantages you can gain by meeting them.

Voluntary sustainability frameworks

Corporate sustainability reporting continues to grow in importance for organisations of all sizes across every sector.

While there are several mandatory regulations that must now be met, there’s also a range of voluntary sustainability frameworks for reporting that can deliver significant benefits and advantages to organisations that participate.

To help with the technical jargon and documentation, we’ve provided a helpful, extensive guide containing everything you need to know about voluntary sustainability frameworks and reporting.

1. The GHG Protocol

The World Resources Institute and the World Business Council for Sustainable Development introduced The Geenhouse Gas (GHG) Protocol in 2001 with support from NGOs and governments.

The GHG Protocol aims to build credible and effective accounting methods and reporting platforms that address climate change. For corporate climate reporting, this is used worldwide.

The GHG Protocol expects to release drafts of revised text in 2024 and final standards/guidance in 2025.

Who is this for?

This is essentially an emissions calculation methodology, so you don’t ‘report against it’ in the traditional sense. Instead, organisations use the GHG Protocol to calculate emissions outputs that are required when reporting against other frameworks.

All sizes of organisations, as well as cities and countries, can follow the GHG Protocol in the calculation of their emissions.

What is involved?

The GHG Protocol is based on five pillars:

• Definition of the boundaries: Organisational perimeter (equity share or control approach), direct (Scope 1) and indirect emissions linked to energy (Scope 2), and other indirect emissions (Scope 3), definition of a reference year.
• Recommended calculation according to the Inter-governmental Panel on Climate Change (IPCC) guidelines.
• Inventory quality management and uncertainties.
• Calculation of emission reductions.
• Advice on setting a reduction target.

The benefits

The GHG Protocol ensures the standardisation of calculations and emission methodologies. It also facilitates greater transparency in reporting GHG emissions.

Other benefits include:

• Allowing external assurance or verification of the results
• Allowing the quantification of GHG emission reductions resulting from the consumption or purchase of renewable energy
• Using a consistent methodology to help organisations monitor their progress against targets
• Helping organisations support their calculations with an internationally recognised methodology.

2. ISO 14064

ISO 14064 is a methodology for calculating greenhouse gas emissions that includes the concept of significance.

• ISO 14064-1: 2018 specifies principles and requirements, at the level of organisations, for the quantification and reporting of GHG emissions and their reduction. That also includes requirements for designing, developing, managing, reporting, and verifying an organisation’s GHG inventory.
• ISO 14064-3:2019 specifies principles, requirements, and guides for verifying and validating GHG statements. It applies to organisation, project, and product GHG statements.
• The ISO 14060 family of standards is GHG programme-neutral. If a GHG programme is applicable, the requirements of that GHG programme will be additional to the requirements of the ISO 14060 family of standards.

Who is this for?

Any organisation can apply this standard for quantifying, monitoring, and reporting GHG emissions and reductions.

What is involved?

The procedure for determining the significant emission items involves organisations taking the following steps to analyse GHG emissions:

• Define the criteria to be used to determine significant sources of emissions, including contribution of the source, level of influence, existence of a risk or opportunity, and so on
• Identify and assess indirect emissions based on expert estimates or sectoral databases
• Apply criteria to select significant indirect emissions
• Represent in a table the significant sources of emissions
• Quantify the emissions of significant items
• Define the periodicity of the quantification of significant items.

What are the benefits?

This calculation methodology serves as a guideline for following the GHG Protocol.

ISO 14064 allows organisations to identify and quantify its significant sources of emissions. It also allows an organisation to determine its reduction objectives and identify areas for improvement.

3. PAS 2060

PAS 2060 is a specification standard that details how to achieve carbon neutrality of a defined subject, whether an organisation, a product, a service, a city, a building, or anything else relevant.

It outlines the requirements for quantifying, reducing, and offsetting greenhouse gas emissions.

Certification occurs on an ongoing 12-month basis, giving organisations an internationally recognised, fully independent measurement of their emissions.

Not based on the latest scientific knowledge on climate, its application does not ensure a climate strategy that limits global warming to 1.5°C.

The PAS 2060 standard will be withdrawn from use on the 30th of November 2025, when it’s due to be replaced by the BS ISO 14068-1:2023.

Who is this for?

Any organisation that wants to commit to climate action and carbon neutrality voluntarily can use this.

What is reported?

Reporting includes:

• 100% of Scope 1 emissions – fuel combustion, company vehicles, fugitive emissions
• 100% of Scope 2 emissions – purchased electricity, heat and steam
• All Scope 3 emissions which contribute more than 1% to the total footprint of the subject must be included.

To adhere to this standard, organisations must follow these steps:

• Determine the perimeter of carbon neutrality
• Measure GHG emissions based on accurate and complete raw data
• Set targets to reduce emissions through the creation of a carbon management plan
• Set a declaration of commitment to carbon neutrality through carbon reduction and offsetting
• Offset GHG emissions with high-quality, certified carbon credits from one of the PAS 2060-approved schemes
• Document and validate your achievement of neutrality through a statement known as the Qualifying Explanatory Statement (QES). The documentation supporting carbon neutrality claims must be publicly disclosed.

What are the benefits?

This is the only internationally recognised certification for organisational carbon neutrality. Following PAS 2060 offers some benefits, including:

• It guides organisations to quantify carbon footprints and supports the subsequent reduction of GHG emissions
• The inclusion of offsetting (via certified credits) encourages the support of projects that add social and environmental value
• It demonstrates a voluntary commitment to climate action

However, the standard is not based on the latest scientific knowledge. Therefore, its use will not result in a climate strategy that is compatible with limiting global warming to 1.5°C.

4. ISO 50001

This international energy management standard provides a framework for implementing, maintaining, and improving an energy management system.

ISO 50001 explains the creation of an internal managerial system that is structured to aid energy efficiency and reduce energy consumption.

Who is this for?

Any organisation that wants to implement an energy management system on a voluntary or compliance basis.

What is involved?

ISO 50001 is structured with ten clauses known as Annex SL, and it encompasses four main areas:

1. Energy management – Processes for identifying, monitoring, and reducing energy usage, with applicability varying for each business
2. Management responsibility – Focus areas for the management team’s involvement
3. Resource management – Assignment of resources like people, infrastructure, and facilities to optimise performance
4. Measurement, analysis, and improvement – Methods to assess management system effectiveness, enabling continuous improvement.

What are the benefits?

Complying with ISO 50001 can be helpful because:

• It’s a certification that can act as a key differentiator or a condition to supply, opening the doors to more business opportunities and increased sales
• It is a route to compliance with the Energy Savings Opportunity Scheme (ESOS) and Article 8 of the Energy Efficiency Directive (EU)
• Unlike ESOS compliance, this is an internationally recognised standard for energy management.

5. ISO 14001

ISO 14001 is an internationally agreed and recognised standard of environmental management systems (EMS), which supports organisations in identifying, managing, monitoring and controlling environmental processes.

These are the most widely used EMS in the world, with over 360,000 ISO 14001 certificates in use globally.

Who is this for?

This is suitable for organisations of all types and sizes across all sectors, including private, non-profit, and governmental.

What is involved?

Gaining the ISO 14001 certification involves a gap analysis, implementing the EMS in accordance with the standard, conducting internal audits, holding management reviews, and passing a certification audit conducted by an external auditor.

What are the benefits?

When granted with ISO 14001 compliance, an organisation receives a certificate. This international certification is a recognised symbol of environmental awareness for current, potential, and prospective clients.

Many certification bodies hold accreditation, which suggests an independent accreditation body has verified its competence, potentially instilling additional stakeholder confidence.

Additional benefits of compliance include:

• Demonstrating green credentials to key stakeholders
• Reducing costs, overheads, and waste
• More focus on proactive management
• Ensuring legislative awareness and compliance
• Achieving enhanced environmental performance.

6. Net-Zero Standard

Launched in October 2021 by the Science Based Targets Initiative (SBTi), the Corporate Net-Zero Standard is a framework for corporate net-zero target setting, which is aligned with climate science.

It provides guidance, criteria, and recommendations for companies to set science-based net-zero targets consistent with limiting global temperature rise to 1.5°C.

Who is this for?

The Net-Zero Standard is aimed at corporates that want to set net-zero targets through the SBTi. The SBTi also proposes a simplified pathway for SMEs to define a net-zero emissions target.

What is involved?

Those who want to comply with this standard must:

• Focus on rapid, deep emission cuts of 90-95% across the organisation’s entire value chain, including Scopes 1, 2, and 3 emissions.
• Set near and long-term targets for making rapid emissions cuts, to roughly halve emissions by 2030.

It’s important to note that net zero is only reached when the organisation achieves its long-term science-based target reduction and neutralises any residual emissions that are impossible to eliminate.

The aim here is to reach net zero by 2050 at the latest.

It’s also recommended that we aim to go beyond the value chain for true net-zero. This involves investing outside the organisation‘s science-based target to help ease climate change elsewhere.

What are the benefits?

This standard offers a range of benefits, including:

• Alignment of the net-zero journey with climate science
• Enhanced your credibility and brand reputation
• Competitive advantages
• Increased investor confidence
• Advanced preparation for future regulations, like the CSRD for EU companies.

7. ACT Initiative

The Assessing Low Carbon Transition (ACT) Initiative uses the SBTi’s sectoral decarbonisation approach to assess the alignment of an organisation’s strategy with the decarbonisation trajectories of the rest of its sector.

Who is this for?

Any company that has calculated its carbon footprint across Scopes 1, 2 and 3) using the Bilan Carbone® approach, ISO 14064-1, or the GHG Protocol can use ACT.

The ACT “step-by step method” offers a method and tools for defining their decarbonisation strategy. This is aimed at organisations that want to define (or redefine) an ambitious decarbonisation strategy that is integrated into their vision and governance.

ACT Evaluation is aimed at organisations that want to measure their decarbonisation strategy’s ambition and alignment to best-practices.

To ensure the evaluation is informative, there must be reduction targets (value, timeframe, scope), and a low-carbon transition plan in place.

This methodology also covers wider issues than a simple carbon accounting framework, such as:

• R&D budget
• Investment earmarking
• Internal governance on climate issues
• Commitments to the value chain and public decision-makers
• And more.

Responding to the methodology involves extensive data collection from within the organisation.

More than 400 organisations are currently using ACT methodologies, across sectors like food and agriculture, automotive, construction, consumer goods  and retail, finance, real estate, oil and gas, among many others.

What are the benefits?

The ACT Initiative offers many advantages to organisations that use it.  These include:

• Identification of sector-specific climate issues and opportunities for improvement to make a smoother low-carbon transition
• A holistic view of the issues relating to climate strategy, such as governance, investment, and so on
• Mobilising teams to improve overall climate performance
• Increasing organisational skills with training courses offered by the Bilan Carbone Association and accompanying tools
• Engaging with partners and investors on decarbonisation actions analysed by ACT
• Empowerment as a result of using ACT assessment tools after a one or two-day training course
• Third-party verification of passing the assessment
• Financial support from ADEME to carry out the required work.

8. The Climate Change Agreement

The Climate Change Agreement (CCA) is a voluntary scheme which provides a reduction on the Climate Change Levy (CCL) as a result of committing to challenging energy reduction targets.

The current CCA, which ended in Target Period (TP) 5, has been extended for two years until 2027 (TP6).

On November 22, 2023 a new Climate Change Agreement Scheme was announced to run for six years after that until 2033.

Who is this for?

Being eligible to hold a CCA depends on the operator carrying out an ‘eligible process’ through two pieces of legislation:

1. A facility will be eligible if it carries out an energy-intensive process or activity detailed in the schedule
2. A site will be eligible if it carries out a Part A(1) or A(2) activity listed.

The CCA scheme is operated under 53 sector-specific umbrella agreements that are typically operated by the trade association for the sector.

What’s reported?

This agreement requires organisations to determine their eligible and ineligible energy and set a baseline. Every two years, data and progress against targets are reported to the sector body and the Environment Agency.

Energy accounted for in CCA includes:

• Combustible fuels
• Grid electricity
• Green electricity and renewable energy
• Oxygen, liquid nitrogen, and solid carbon dioxide.

It’s important to note that penalties will be applied if organisations fail to meet their agreement target.

Participating organisations are now required to complete an “Energy Carbon Savings Actions and Measures Implemented” form and record what they have done to save energy.

What are the benefits?

Participating organisations have financial incentives available, as operators holding a CCA can receive a maximum CCL discount of:

• 92% of electricity bills
• Up to 88% on gas
• Up to 77% on LPG

Sustainability reporting guides

This guide to voluntary sustainability reporting frameworks is part of a wider series, where we’ve detailed all the voluntary and mandatory reporting requirements for sustainability and carbon reduction across various sectors.

You can find more guidance in the other articles in this series here as we publish them:

• Mandatory sustainability frameworks
• Mandatory sustainability frameworks for financial institutions
• Mandatory energy and emissions sustainability frameworks
• Voluntary sustainability frameworks for financial institutions
• Voluntary energy and emissions sustainability frameworks

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