Demystifying the landscape of carbon quantification and reporting standards: a practical note for the financial sector

In response to the global challenge of climate change, financial institutions are increasingly called upon to assess and disclose their carbon emissions. Various global carbon quantification and reporting standards were developed, such as the Greenhouse Gas (GHG) Protocol, Task Force on Climate-related Financial Disclosures (TCFD), Partnership for Carbon Accounting Financials (PCAF) and others. Unfortunately, the now diverse landscape of standards increases the complexity for institutions seeking to develop voluntary carbon quantification and reporting. This study addresses the complexity issue by developing a criteria-based tool that summarizes the various components and requirements of the carbon standards. We propose eight criteria that summarize the standards’ key elements, requirements and relevance to the financial industry. We analyze seven major carbon quantification and reporting standards, systematically evaluating them against our tool. By doing so, we provide financial institutions with valuable insights in selecting appropriate standards to inform their emissions quantification and reporting decisions.