The International Organization for Standardization (ISO) is currently debating whether to develop standards for measuring the carbon footprint of business activities.  The ISO is the largest standardization organization in the world, having published more than 17,000 standards for a broad array of industries, including several related to environmental topics. 

The Greenhouse Gas Protocol (GGP) is the most widely-used standard today for quantifying and managing greenhouse gas (GHG) emissions.  The GGP was created by the World Resources Institute and the World Business Council for Sustainable Development, and is actually used by the ISO as a basis for its current three part “Specification with guidance at the organization level for quantification and reporting of greenhouse gas emissions and removals.”  These current ISO specifications with guidance serve more as informal guidance for business, and are not as rigorous as ISO’s actual standards.  The GGP on the other hand does not provide detailed standards for individual industries, but rather focuses on the theoretical framework for designing GHG accounting systems. 

The ISO is expected to vote in November about whether to pursue a carbon footprint standard, which would likely not be completed until 2011.  This effort, however, may prove critical in convincing the investment community to get on board with GHG reduction programs.  In this context, the ISO standards will be most useful for the legitimacy they lend to GHG accounting practices.  In many industries, the standards carry so much weight that a company cannot do business without the proper ISO certification.  If a series of standards are adopted for different commercial and industrial industries, it will mean that emission figures generated within these industries can be deemed reliable. 

Without an assurance of reliability and integrity in GHG reporting, the investment community has shown reluctance to accept the risk inherent in GHG emissions reporting.  By having the backing of an organization with the reputation of the ISO, however, it will be difficult to raise questions about the reliability of industry-specific GHG measurement and reporting. 

Perhaps the greatest benefit of any future ISO standards, should they be completed as expected, will be the broad base of activities included in the emissions measurements.  Companies will presumably be required to account for all GHG emissions in their business model - transportation and shipping, electricity use, labor, and any other sources.  This will be a significant step forward from the situation today, where companies are struggling to account for all their GHG emissions, in large part due to a lack of standardized methodologies. 

This will not be the first foray into GHG reporting by the ISO.  In 2006, the ISO approved standard 14064, which covers the quantification, monitoring and reporting of entity and project emissions and removals.  Standard 14065 arrived in 2007, and details the requirements for GHG validation and verification bodies.  These standards have helped ensure the adequate development of the European Union Emissions Trading System, the world’s largest carbon marketplace. 

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