Accurate carbon accounting is a cornerstone of corporate sustainability strategies, yet forest carbon accounting has remained a contentious issue. In response, the Greenhouse Gas (GHG) Protocol has announced a Forest Carbon Accounting Technical Working Group (TWG) to resolve long-standing challenges in how forest-related carbon stocks and removals should be reported in corporate inventories. The TWG, supported by Ernst & Young (EY) as facilitators, will play a pivotal role in shaping the future of land sector emissions reporting. With the finalized Land Sector and Removals Standard and Guidance now scheduled for Q4 2025, businesses must stay ahead of these developments to ensure compliance and align with best practices.
Addressing Forest Carbon Accounting Gaps
1. The Role of the Technical Working Group
The Forest Carbon Accounting Technical Working Group (TWG) was established following the approval of the Land Sector and Removals Advisory Committee’s proposal. The Independent Standards Board (ISB) selected a diverse group of experts to participate, ensuring that a broad range of perspectives on forest carbon accounting is represented. The TWG’s key responsibilities include:
Developing a clear, standardized approach for reporting CO₂ emissions and removals from forest land and forest product use in corporate inventories.
Addressing inconsistencies in carbon stock change accounting and ensuring alignment with global best practices.
Providing recommendations for the Independent Standards Board (ISB) to consider in the finalization of GHG Protocol standards.
Making technical updates publicly available through the GHG Protocol’s governance document repository to ensure transparency.
Given the technical complexity of forest carbon accounting, the GHG Protocol Secretariat has engaged facilitators to ensure balanced stakeholder input. The outcomes of the TWG will directly shape how businesses measure, report, and verify their forest-related carbon impacts.
2. Corporate Implications: How This Affects Businesses
For companies integrating net-zero and sustainability goals, the new framework will introduce changes in how land-use emissions are accounted for. Key impacts include:
More rigorous carbon stock tracking: Companies with forestry assets or investments in carbon offset projects must adapt to evolving reporting requirements.
Alignment with global climate standards: These updates will influence corporate disclosures under major ESG frameworks like CDP, SBTi, and IFRS Sustainability Standards.
Stronger scrutiny of carbon offset credits: Businesses using forest carbon offsets will need to ensure compliance with new accounting rules, reducing greenwashing risks.
Updated Timeline: What’s Next for the Land Sector and Removals Standard?
1. Delayed Release to Q4 2025
While the initial timeline for the Land Sector and Removals Standard and Guidance aimed for an earlier publication, unresolved issues have caused delays. Specifically, the Advisory Committee failed to reach a consensus on agricultural leakage quantification, prompting the GHG Protocol Secretariat to intervene. Now, the Independent Standards Board (ISB) is tasked with making a final decision on both forest carbon accounting and agricultural leakage by late 2025.
Businesses that rely on GHG Protocol standards for emissions disclosure and climate target setting must anticipate these regulatory shifts and adjust their sustainability strategies accordingly. While the GHG Protocol remains committed to finalizing standards swiftly, organizations should proactively engage with the consultation process and prepare for the transition.
2. Strategic Takeaways for Executives
Executives and sustainability leaders should take the following steps to stay ahead:
Monitor TWG Developments: Regularly check the GHG Protocol governance repository for updates on new methodologies and disclosure frameworks.
Engage in Stakeholder Consultations: Provide feedback on draft guidance to help shape practical and industry-aligned carbon accounting standards.
Align Corporate Carbon Strategies: Ensure your company’s GHG inventory and sustainability reports align with upcoming land-sector accounting changes.
Assess Carbon Offset Portfolios: Companies using forest-related carbon credits should prepare for more stringent reporting and verification criteria.
Conclusion
As the GHG Protocol advances forest carbon accounting reforms, businesses must remain proactive in adapting to the new requirements. The Forest Carbon Accounting TWG and the broader Land Sector and Removals Standard update represent a critical shift in sustainability reporting, particularly for companies with forestry assets, supply chain emissions, or reliance on carbon offsets. By staying informed, engaging in policy discussions, and aligning ESG strategies, businesses can navigate these changes effectively while reinforcing their commitment to climate leadership.