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Credible and complete Scope 3 GHG accounting and reporting is needed to drive innovation in the low carbon economy, says global report from ACCA


09 May 2011

The measurement and reporting of Scope 3 Greenhouse Gas (GHG) emissions needs to be much more comprehensive and prevalent says ACCA, (the Association of Chartered Certified Accountants) today in a report called The Carbon We’re Not Counting: Accounting for Scope 3 carbon emissions.

The report asserts that global businesses will find it increasingly difficult to evaluate the nature, extent and value of GHG emission-associated risks and opportunities without high quality Scope 3 information. Scope 3 is classified as emissions that are a consequence of the activities of the company, but occur from sources not owned or controlled by the company.

However, ACCA and the report’s author, Dr Alan Knight, are concerned that none of the many regulatory or voluntary accounting and reporting programmes require Scope 3 accounting and reporting.

Dr Alan Knight says: “Over the last 10 years, much has been done to codify and promote the measurement and reporting of GHG emissions. But few companies have taken up the challenge of measuring and reporting Scope 3 emissions. This is holding back the much needed innovation demanded by the low carbon economy.”

Rachel Jackson, head of sustainability at ACCA commissioned the report and believes that the accountancy profession has a large part to play in changing the status quo. Ms Jackson says: “Corporate understanding of the risks and opportunities associated with GHG emissions must be wholly realised, so that accountants can advise on their impact on performance and value. Scope 3 emissions must be measured and accounted for – by omitting them the datasets remain incomplete, and our much-needed transition to a low carbon economy will be slower.”

The report also recommends that:

    • Governments, intergovernmental agencies and other standards and policy setters should consider making Scope 3 mandatory as it is currently voluntary
    • Scope 3 information and analysis should begin to be brought into the investment and appraisal process.

Dr Alan Knight concludes: “Credible and complete carbon accounting is the best way forward. There is lots of opportunity for market-leading innovation in this field and we hope this report will inspire people to take up the challenge.”

Rachel Jackson concludes: “If accountants are to rise to the challenge they need to really understand the implications of Scope 3 emissions and provide the advice that will make the organisations they work with leaders in the low-carbon economy.”

GHG emissions types
Scope 1: direct GHG emissions - Direct GHG emissions occur from sources that are owned or controlled by the company.

Scope 2: electricity indirect GHG emissions - GHG emissions from the generation of purchased electricity consumed by the company. Purchased electricity is defined as electricity that is purchased or otherwise brought into the organisational boundary of the company. Scope 2 emissions physically occur at the facility where electricity is generated.

Scope 3: other indirect GHG emissions - All other indirect emissions. Scope 3 emissions are a consequence of the activities of the company, but occur from sources not owned or controlled by the company.

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For further information, please contact:
Colin Davis, head of international communications
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Notes to Editors

  1. The full report can be downloaded from ACCA’s website at this link:
  2. ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.
  3. We support our 147,000 members and 424,000 students in 170 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. We work through a network of over 80 offices and centres and more than 8,500 Approved Employers worldwide, who provide high standards of employee learning and development. Through our public interest remit, we promote appropriate regulation of accounting and conduct relevant research to ensure accountancy continues to grow in reputation and influence.
  4. Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. We believe that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. Our values are aligned to the needs of employers in all sectors and we ensure that through our qualifications, we prepare accountants for business. We seek to open up the profession to people of all backgrounds and remove artificial barriers, innovating our qualifications and delivery to meet the diverse needs of trainee professionals and their employers.

Cecile Bonino
Public Affairs and Media Relations Officer-EU ACCA
CBI business house
14 rue de la Science
BE-1040 Brussels
tel:+32 (0) 2 286 11 37
mob: +44 (0) 7809595008