GHG Protocol Consequential Impacts Survey

Additionality should be grounded in financial causality. A project or operational change should be considered additional only if the reporting entity’s action is financially material to whether it occurs or continues. This is the only criterion that directly tests whether corporate activity caused a change in the real world.

The core framework should therefore require three elements: a regulatory screen, a timing screen, and a financial analysis. The regulatory test ensures that actions required by law are not credited. The timing test ensures that the intervention occurred before or at the point when financial decisions were made. The financial analysis test then evaluates whether the company’s commitment was large enough, long enough, and sufficiently reliable to change the project’s economic outcome.

Contract structure and price both matter for financial materiality. A long-term contract at a low price may be immaterial, while a short-term contract at a high price could be decisive. There is no single contract length or instrument that guarantees additionality. What matters is whether the net present value or expected return of the project meaningfully changes because of the company’s commitment.

Positive lists can play a useful supporting role by identifying contract types and market contexts that are almost always financing-relevant, such as long-term bundled PPAs or long-term forward REC contracts in regions with limited policy support. When well defined, these can reduce transaction costs by allowing projects to qualify without full financial modeling. However, positive lists must be high-bar, narrowly scoped, and periodically updated as markets evolve, since arrangements that were once financially decisive can become business-as-usual over time.

Other tests such as common practice, first-of-its-kind, barrier, or performance standards are not reliable substitutes for financial causality. These approaches are often subjective, easily gamed, or poorly aligned with how projects are actually financed. They may provide contextual information, but they do not determine whether a corporate action changed a real investment or operational decision.

In summary, additionality in consequential accounting should be based on whether a corporate commitment is financially material and timely, with regulatory safeguards to avoid crediting mandated activity. Positive lists and contract features can help streamline this assessment, but they should always be anchored to the underlying question of whether the action changed what happened in the power system.

We do not see a need for any other additionality tests beyond those already included in the framework. The existing tests, particularly regulatory, timing, and financial materiality, are sufficient to assess whether a corporate action plausibly caused a project or operational change to occur.

However, there is a need for clearer guidance on how to quantify emissions impacts once additionality has been established, especially for grid-interactive and dispatchable assets such as energy storage or flexible demand. In these cases, emissions impacts may arise from changes in operational behavior rather than from asset construction alone.

Approaches such as dynamic baselining can play a valuable role in impact quantification by comparing observed operation against a modeled counterfactual, for example revenue-maximizing dispatch versus emissions-optimized dispatch. This can help quantify incremental emissions reductions attributable to a reporting entity’s intervention, particularly for behavioral or operational changes.

That said, dynamic baselining should not be treated as a standalone additionality test. It does not establish causality, but rather measures the magnitude of impact once causality has been demonstrated through other tests. We therefore recommend that such methods be addressed within consequential accounting or impact quantification guidance, rather than being incorporated as additionality gates.

Maintaining a clear separation between tests for causality and methods for impact measurement will help preserve rigor, comparability, and auditability while still allowing the framework to recognize meaningful operational emissions reductions.

While we answered “no”, we want to provide some context.

Additionality tests should be structurally standardized and applied consistently across regions. Varying the tests themselves by geography would significantly reduce comparability across reporting entities and over time, and would materially increase implementation and audit complexity for companies operating in multiple markets.

Regional differences are better addressed through the inputs and evidence used to apply a common set of tests, rather than by changing the tests themselves. For example, regulatory context, market maturity, revenue expectations, and financing conditions can and should inform how a regulatory, timing, or financial materiality test is evaluated in a given region. However, the underlying logic of those tests should remain consistent.

Maintaining a uniform test structure ensures that additionality claims are comparable across geographies, reduces opportunities for gaming or regulatory arbitrage, and keeps the framework feasible for widespread adoption. This approach also aligns with the global role of the GHG Protocol, which is to provide consistent accounting guidance while allowing for region-specific data and context within that structure.

Consequential accounting should be reserved for actions that plausibly cause a change in real-world emissions outcomes. Creating separate categories of “causal” and “associative” claims, each with different rigor requirements, would undermine the purpose of a consequential metric and create avoidable confusion.

Associative claims, such as claims based on unbundled EACs without evidence of financial or operational causality, do not demonstrate that an organization’s action changed generation, dispatch, or investment decisions. Allowing such claims into a consequential framework, even with reduced rigor, would make the metric vulnerable to gaming and blur the distinction between real impact and symbolic association.

Instead, consequential accounting should apply a single, consistent standard that requires plausible causality, net emissions accounting (including both induced and avoided emissions where relevant), and transparent, verifiable methods. Actions that do not meet this threshold can still be disclosed through other channels, but they should not be presented as consequential emissions impacts.

Maintaining one clear standard protects the credibility of consequential accounting, supports comparability across reporting entities, and ensures that the metric distinguishes between actions that genuinely influence emissions outcomes and those that do not.

Lastly, in designing this framework, it is also important to balance rigor with feasibility. Consequential accounting that relies on highly bespoke, expensive, or project-specific analyses risks limiting participation to a small subset of organizations and reducing overall impact. A standardized approach that is practical to implement at scale, even if it involves conservative assumptions and some residual uncertainty, is preferable to a theoretically perfect framework that is rarely used. Transparency, consistency, and auditability are more important than eliminating every possible edge case.