The Risk of Divergence: Why Jurisdictional Relief from the GHG Protocol Undermines Global Alignment

As part of our submission to the ISSB’s Exposure Draft on amendments to IFRS S2, Eco Sustainability has formally registered its stance.

In this opinion editorial, we offer our insights and position. To view our Technical Opinion, please see the full text of our formal submission.

Full Text From ISSB Exposure Draft

Question 3—Jurisdictional relief from using the GHG Protocol Corporate Standard

The ISSB proposes to amend paragraphs 29(a)(ii) and B24 of IFRS S2 to clarify the scope of the jurisdictional relief available if an entity is required by a jurisdictional authority or an exchange on which it is listed to use a method other than the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (2004) to measure greenhouse gas emissions for a part of the entity. The amendment would clarify that this relief, which permits an entity to use a different method for measuring greenhouse gas emissions, is available for the relevant part of the entity when such a jurisdictional or exchange requirement applies to an entity in whole or in part, for as long as that requirement is applicable.

Paragraphs BC39–BC43 of the Basis for Conclusions describe the reasons for the proposed amendment.

Do you agree with the proposed amendment? Why or why not?

☐ Broadly agree

☐ Broadly disagree

☐ Neither agree nor disagree

We Broadly Disagree

Eco Sustainability BROADLY DISAGREES with the proposed amendment to permit jurisdictional relief from the GHG Protocol, even when required by regulators or stock exchanges. While we understand the intention to accommodate local compliance, this flexibility threatens to undermine the consistency, comparability, and global alignment that IFRS S2 is designed to deliver.

Why This Matters

1. Fragmentation of Methodologies

Allowing different GHG accounting methods across jurisdictions - each with their own emission factors, boundaries, and GWP values - creates fragmentation. This makes emissions data harder to compare across time, geographies, or companies and weakens global benchmarks.

2. Violates Core Accounting Principles

Both the GHG Protocol and ISO 14064 are anchored in consistency, completeness and transparency. Granting jurisdictional relief undermines these principles and introduces uncertainty in third-party verification, which reduces assurance confidence.

3. Delays Harmonization Across Regions

Take ASEAN as an example: Singapore’s NEA framework differs from the GHG Protocol in areas like boundary-setting and verification requirements. If each country applies its own system, harmonization across regional regulators becomes much harder - and mutual recognition agreements less feasible.

4. Encourages Proxy-Based Reporting Over Real Data

Non-standard methods often rely on spend-based estimates or financial proxies. These may reward cost reductions rather than actual emissions reductions - for example, if a company cuts costs by outsourcing but emissions stay the same or rise.

5. Inadequate Technical Rigor

High-quality Scope 3 reporting depends on activity-based methods and granular data. Many jurisdictional alternatives lack the technical depth to produce emissions estimates that are actionable or reliable for transition planning.

Our Recommendations

• Maintain the GHG Protocol as the global default.

• Where jurisdictional methods are used, require full reconciliation - including boundary definitions, assumptions, and factors used.

• Avoid permanent exemptions. Transitional relief may be justified, but must include a roadmap toward full alignment.

• Support jurisdictions with capacity building and crosswalk tools to bridge technical and procedural gaps.

Conclusion

Local flexibility may be necessary, but it cannot come at the cost of global coherence. If emissions data is to guide capital allocation, risk pricing and decarbonization pathways, it must be comparable and credible across markets. Jurisdictional relief, as proposed, risks weakening the very foundation of that trust.

About Eco Sustainability

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