Over the past two decades, the Greenhouse Gas Protocol (GHG Protocol) has served as the foundation of corporate greenhouse gas emissions reporting, giving companies a common language to measure and disclose emissions. GHG Protocol’s corporate greenhouse gas inventories have helped companies understand their emissions sources, identify mitigation opportunities, and track progress over time.
At the same time, many organizations have found that they have limited ability to address and reduce their emissions, especially in scopes 1 and 3. This limitation is largely by design, as the physical inventory was developed to estimate carbon footprints, not to establish, suggest, or lead companies to specific decarbonization actions.
As an unintended consequence, existing GHG Protocol guidance, which has historically been used for voluntary commitments but is increasingly referenced alongside regulatory requirements and stakeholder initiatives (i.e. CDP), tempts companies to overemphasize their emissions measurement and reporting work at the expense of driving real-world emissions reductions. This result is particularly acute for scope 3 emissions, where inventories remain largely dependent on econometric averages and spend-based methodologies despite companies devoting substantial resources to improve data quality. These efforts can return more precise emission information, but precision is not a decarbonization action.
The climate crisis demands more than precise accounting. GHG accounting frameworks must evolve to help companies envision specific, ambitious decarbonization strategies: strategies they can implement within their economic context, that they can monitor over time, and that enable credible reporting, incentives, and accountability mechanisms.
Incentivizing Meaningful Decarbonization Actions
GHG Protocol’s Action and Market Instruments (AMI) framework provides an opportunity to dramatically improve how companies establish climate strategies and meet targets. The recently released AMI White Paper proposes that companies report climate actions through a new framework of disclosure “ledgers” or “statements”. As proposed, the AMI framework allows companies to report activities across three distinct ledgers in addition to the physical GHG inventory: contractual, impact (or consequential), and non-GHG metrics. These statements would provide companies with a way to credibly report on decarbonization actions and investments that are not well-captured under current reporting norms.
3Degrees strongly supports the development of the AMI framework, which strengthens the current reporting ecosystem by supplementing the physical inventory with information on critical climate investments and actions, as 3Degrees similarly suggested in this Insights article. The AMI framework represents a necessary and urgently needed next step in corporate climate reporting because:
The AMI framework could add credibility to corporate impact claims by standardizing the methods and criteria underpinning reported actions, while still providing companies the flexibility to choose where and how to invest their sustainability budgets.
Companies are more likely to invest in emissions reductions, low-carbon fuels, renewable energy, supplier interventions, and other mitigation activities when their efforts can be monitored internally for success, and transparently accounted for in climate disclosures.
The proposed multi-statement approach better reflects the reality that companies use multiple tools to drive decarbonization across complex operational footprints and value chains. This includes contractual instruments such as biomethane and renewable thermal certificates for scope 1, semi-traceable project-based interventions for scope 3, and carbon credits and removals occurring beyond the value chain. The AMI framework enables transparent reporting on a much wider suite of corporate actions and investments, painting a clearer picture of how companies are addressing our rapidly changing climate.
As proposed, the AMI framework would enable companies to pair physical inventory reporting with credible, action-oriented pathways and to recognize measurable progress achieved through those actions. This in turn could help mobilize capital and support transparent communication of climate impact in ways that are meaningful to customers, investors, employees, and other stakeholders.
Critical Considerations for a Successful AMI Framework
The AMI framework is still in very early stages of development, with an initial Request for Information launched in March to gather preliminary market views on the general concept of multi-statement reporting. Regardless, GHG Protocol and market stakeholders must approach the design of the framework very thoughtfully, as it will impact how companies set decarbonization goals and make associated investments. As GHG Protocol develops the AMI framework, 3Degrees recognizes a number of critical design considerations that will determine whether the framework is widely adopted and used credibly. These considerations include:
Clear guidance on using, accounting for, and reporting cross-scope market instruments is urgently needed
Waiting until 2028 creates significant uncertainty for companies at a time when immediate action is needed. The timing of the final AMI framework (completion in 2028) presents a significant barrier to action.
For example, recent GHG Protocol releases are already dampening corporate action pending AMI guidance. The Land Sector and Removals Standard and the scope 2 guidance draft both narrow the actions available to companies if they use the GHG Protocol to monitor and communicate progress. The dissonance between these releases and the possible AMI direction creates significant uncertainty and risk to companies seeking to make credible climate progress today. The GHG Protocol should provide immediate clarity on the viability of legacy contracts, the relevance of interim third-party proposals, or other guidance to enable companies to act with confidence until all standards are final.
Explicit guidance on statement interaction is critical for credible claims.
Many companies seek to consolidate their climate actions and investments under a single claim or target. However, because different statements and associated accounting approaches measure and represent different things, clearer guidance is needed on how each statement should map to the claims companies make. To this end, GHG Protocol must answer critical questions such as whether the statements are mutually exclusive, and if so, whether they can be aggregated, netted, or otherwise used to make a cohesive claim.
Similarly, since actions captured on the contractual ledger represent the purchasing decisions of an individual company, whereas actions on the impact ledger represent reductions to global emissions, there must be clear guidance on what each statement conveys in terms of impact, and the associated claims companies can make based on each one.
Requires a simplified approach to scope 3 measurement to deliver intended benefits
Implementing the AMI framework on top of the current scope 3 standard’s explicit expectation of primary scope 3 data-chasing will add significant complexity to a system that many companies already struggle to use. Similar to global disclosure standards (IFRS S2), the AMI should focus corporate momentum on actions, not on chasing precise supplier data.
Impact hinges on alignment with major standards bodies
Critically, the success of AMI will depend on rapid adoption by target-setting initiatives such as SBTi and others. Without clear integration into target-setting frameworks, the practical usability of AMI will be limited, reducing its ability to drive corporate action at scale. Accelerated coordination between GHG Protocol and SBTi will be necessary to ensure that companies can translate AMI guidance into actionable target-setting and progress tracking in the near term.
Impact statement’s success depends on it being optional and limited to positive decarbonization
Requiring that companies account for activities that increase emissions in the impact ledger risks creating an incredibly complex and onerous system that duplicates information already at hand. The physical inventory is designed to capture and reflect a company’s emitting activities, while the impact ledger has the potential to play a different role, allowing companies to measure their mitigation actions in a way that’s consistent and comparable.
GHG Protocol should establish that the impact ledger does not need to be exhaustive: companies should have the freedom to choose which goals to set, and hence what tabulations are necessary to monitor and communicate progress on those goals. This flexibility enables companies to focus on mitigation activities that are most relevant to their business and value chain.
Should be designed for simplicity and usability
The AMI framework may make GHG accounting and reporting more complex by adding new, optional reporting ledgers and separating the physical inventory from a market-based inventory, which reporters have already been doing to some extent through the dual reporting of scope 2 emissions. As such, GHG Protocol should consider the critical design details above to strive for simplicity, clarity, and flexibility to ensure broader adoption of this new reporting method.
GHG Protocol’s AMI framework has the potential to reorient corporate GHG accounting around incentives that enable companies to take action in ways that are not only meaningful in reducing emissions, but also transparent and credible.
3Degrees strongly supports the development of a multi-statement GHG report and believes the creation of this framework can further incentivize companies to take meaningful climate action.
At the same time, GHG Protocol must resolve key design uncertainties by clarifying near-term action, defining ledgers and instruments, simplifying scope 3 measurement, aligning with target-setting bodies, and ensuring a flexible, simple framework.
Shape the new framework
We urge all stakeholders to participate in the GHG Protocol’s Request for Information to provide critical feedback and input on this new framework by May 31, 2026.
