New report investigates how companies are gaming global emissions reporting rules
As the world grapples with the escalating climate crisis, a new report charts how loopholes in global de facto climate reporting standard, the Greenhouse Gas Protocol (GHGP), enable major corporations, including Amazon and Meta, to significantly underreport their emissions.
These companies are major funders of the GHGP and co-founders of an initiative, the Emission First Partnership, that is campaigning to weaken reporting standards even further. According to research by Princeton University, changes pushed through this initiative could allow firms to underreport their emissions by as much as 90%.
The release of “Hidden Power, Broken Rules“ comes as the Greenhouse Gas Protocol (GHGP) — the de facto global standard for corporate emissions reporting — is undergoing its first review in over a decade.
Key Findings:
Amazon’s electricity emissions are five times higher than it reports in its 2023 Sustainability Report, while Meta’s Scope 2 electricity emissions of 3,921,611 Mt CO2 are 14,365 times larger than the 273 Mt CO2e of Scope 2 emissions featured in it’s 2023 Sustainability Report.
The GHGP allows companies, including Amazon and Meta, to claim they are using 90-100% renewable energy whilst drawing significant amounts of their power from fossil-fuel heavy grids.
The GHGPs ‘choose your own adventure’ approach to reporting allows companies to draw their own reporting boundaries, omitting emissions they deem ‘immaterial’ or relegating them to less rigorous reporting categories. Unlike Google and Microsoft, Amazon and Meta use this loophole to define electricity emissions from their leased data centres as ‘indirect’ Scope 3 emissions. Weak Scope 3 reporting standards in the GHGP makes these emissions — which in Amazon’s case accounts for emissions from approximately half of its AWS data centre empire — impossible to track and verify.
Amazon and Meta are currently listed as primary funders of the GHGP, and the Bezos Earth Fund, which is chaired by Jeff Bezos but operates as a separate legal entity to Amazon, is the sole disclosed donor to the current review of GHGP standards.
“As major corporate funders of the GHGP team-up to weaken it, the GHGP will lose credibility if its leadership fails to release governance standards that guard against conflict of interest and require science-based decision making,” says Action Speaks Louder Strategy Director, Laura Kelly.
“We aren’t talking small loopholes here; when you read a company’s reported emissions, start by imagining they could be at least double that, depending on how the company has cherry-picked the GHGP.
If this isn’t fixed, it isn’t just the GHGP which risks losing credibility, but the standards that the GHGP underpins, like the Science Based Targets initiative (SBTi), and the US SEC’s climate disclosure laws. We’re confronted with a massive hole in corporate accountability, which is undermining our fight for a safe climate,” Ms Kelly says.
The full report, “Hidden Power, Broken Rules,” is available now and offers a comprehensive look at the critical changes needed to ensure that corporate reporting is accurate and aligns with the urgent realities of climate change.