Change Climate refers to Greenhouse Gas Protocol Guidance (see Chapter 5) on recalculation policies and thresholds. The purpose of baseline recalculation is to ensure "meaningful and accurate comparison of emissions data over time." Rebaselining is done to allow "like with like" comparisons between the base-year GHG emissions and emissions reported in later years. Baseline review and recalculation, when completed, serves to ensure that both emission trends and emission reductions can be calculated over time.
If your business recently underwent significant structural changes or your measurement methodology has been updated you may be wondering if you need to recalculate historical emissions.
What's the difference between Rebaselining and Restatements?
Rebaselining is a recalculation of baseline emissions, whereas a restatement can cover any year but typically not the base-year. Restatement of emissions between the base-year and the previous reporting period is not mandatory but may be needed in the case of significant changes to the business or measurement methodology. The term “restatement” is not formally defined in any of the GHG standards, and therefore, there are no formal requirements but we'll outline best practices for emissions restatements below.
Setting a Significance Threshold for Emissions Recalculations
GHGP advises all companies to develop their own base year recalculation policy that states the criteria for a base year recalculation exercise. The policy should include a significance threshold for deciding on historic emissions recalculation. It is the responsibility of the company to determine the significance threshold that triggers a base year emissions recalculation and to disclose it. 5% and 10% are commonly adopted significance thresholds. In most cases the significance threshold depends on the use of the information, the characteristics of the company, and the features of structural changes.
The following cases can trigger recalculation of base year emissions or other historical emissions should they result in significant impact on the base year emissions:
Structural changes in the reporting organization such as mergers and acquisitions
Changes in calculation methodology or improvements in the accuracy of emissions factors or activity data
Discovery of errors
If you have set a science-aligned or science based target you should also refer to SBTi’s guidance (see section VII) on target recalculations.
Restating Historical Emissions
Emissions corrections or restatements may be issued if a recalculation of historical emissions is triggered.
For certifying companies, an emissions correction should be made for any errors or omissions that result in a significant change in a certified emissions totals. An emissions restatement may be issued due to structural changes of a company (i.e mergers and acquisitions) or changes to measurement methodology that result in a significant change in emissions for the measurement year.
Corrections and restatement of historically certified measurements should be documented and shared with the Change Climate team via certify@changeclimate.org for review and approval to be updated on the certified brand's historical certification records.
Change Climate released and update to the BEE, do I need to recalculate historical measurements?
The Change Climate Project periodically releases Emissions Factor and methodology updates to the BEE. It's to be expected that updates to the BEE may result in differences in the GHG emissions you observe from a single purchase year over year. You may be wondering if updated emissions factors or methodology should be applied to your historical measurements in the BEE or if a base year recalculation is necessary.
When we calculate emissions in the BEE, we keep up to date with the most recent methodology and emissions factors available. That means that if you completed a historical measurements in the BEE, your emissions were calculated with then-current data. Periodic emission factor or methodology updates to the BEE do not necessitate a base year recalculation exercise or a restatement of past measurements because we are consistently applying the latest data to your measurement each year you complete a carbon inventory in the BEE.
Emission factors may increase or decrease year over year as the latest science is incorporated into the emission factor libraries that we source from. This is to be expected. We know that that the world changes and we want emissions factors to reflect those changes. However it wouldn't be pragmatic to apply recent emission factor data to all historical measurements nor to restate emissions each year solely based on emissions factor updates.
If you do observe changes in emissions due to methodology updates, it’s important to be as transparent as possible to explain year-to-year differences. In your emissions reporting and disclosures, try to communicate — to the best of your ability — what caused the increase or decrease. For example, if you are seeing lower emissions but still buying the same amount of material, that might point to an emission factor that decreased. While imperfect, this is a common challenge that all companies measuring and reporting emissions must navigate. For now, transparency is the best tool to explain the results you’re seeing.