The Greenhouse Gas Protocol, a coalition of environmental organizations and businesses, developed what have become de facto standards for companies to disclose the carbon footprints of their operations, energy use, and products, classifying them as scope 1, 2, and 3 emissions.
Companies and investors are increasingly relying on the standards to guide trillions of dollars in environmentally conscious investments, while regulators such as the United States Securities and Exchange Commission are using them to develop proposed disclosure requirements to combat climate change.
According to researchers and others close to the effort, the group is now commissioning a review of the standards, prompted in part by concerns that the current guidelines could result in misleading corporate emissions reports or even outright greenwashing, the term for making something appear more environmentally friendly than it actually is.
One major source of concern: guidelines that allow hundreds of companies ranging from Apple Inc. to AstraZeneca PLC to claim they are obtaining carbon-free energy even when this does not always reflect their actual energy consumption.
"There wasn't a huge amount of scrutiny on the numbers the companies were disclosing ten years ago," said Matthew Brander, a senior lecturer in carbon accounting at the University of Edinburgh Business School who has criticized some of the standards. "Investors are increasingly using GHG disclosures to make capital-allocation decisions." And I believe that is just putting a little more emphasis on the robustness of the numbers that are being disclosed."
The review of GHG Protocol standards emphasizes the rising stakes in corporate climate targets and emissions disclosures. The SEC proposed last month that listed companies disclose greenhouse gas emissions as well as climate-related risks; European and Japanese regulators are also pushing for various disclosure plans.
The GHG Protocol, which has been developing the standards for the past two decades, stated that regulatory scrutiny was a major reason for its review.
"GHG Protocol is planning additional guidance to improve standard implementation and align with accounting rules in development," said Pankaj Bhatia, director of GHG Protocol at the World Resources Institute, a climate-focused nonprofit.
Companies and investors all over the world are already using the GHG Protocol's guidelines to set "net zero" pledges to offset emissions and track progress toward low-carbon goals.
According to the group, GHG Protocol standards are used by more than 90% of Fortune 500 companies.
According to the Science Based Targets initiative, which assists businesses in setting goals to reduce their scope 1, 2, and 3 emissions, over 1,000 companies have set greenhouse gas-reduction targets. These figures are used by investors to determine whether the companies they fund are environmentally friendly. However, as the standards gain traction, some critics are questioning whether they accurately reflect companies' true carbon footprints.
Some of the most intense scrutiny has centered on how the standards handle scope 2, or greenhouse-gas emissions associated with energy purchases by businesses. The GHG Protocol asked Anders Bjrn, a postdoctoral fellow at Concordia University in Montreal who has done research questioning some target-setting methodologies, to look into the issue, according to Mr. Bjrn and a person familiar with the matter. Another Concordia researcher is going over the scope 1 and scope 3 guidelines.
Currently, the GHG Protocol's scope 2 guidance allows businesses to claim that they are obtaining renewable energy and thus have lower emissions, even if they are consuming electricity in the conventional manner off the power grid.
Because businesses have no control over the type of electricity they receive from the shared grid, which can include everything from coal-fired power plants to nuclear facilities, many resort to purchasing financial instruments that allow them to claim credit for the "greenness" of carbon-free energy.
In some cases, those instruments, known as renewable energy certificates, or RECs in the United States, are sold separately from the actual energy generated. RECs have historically been very cheap, providing companies with a low-cost way to report reduced emissions while raising concerns that those claims may be misleading.
Critics argue that large corporations can claim the grid's green power for accounting purposes while the dirtier energy on the same grid is attributed to homeowners or other power consumers, implying that the practice may not reduce overall emissions at all.
"Can I go buy a walk-to-work certificate from some guy on the other side of town who walks to work every day and say my emissions are zero if I drive my Hummer to work every day?" enquired Michael Gillenwater, co-founder of the Greenhouse Gas Management Initiative, a nonprofit based in Seattle that focuses on emissions accounting.
Mr. Gillenwater and Mr. Brander collaborated on the GHG Protocol's scope 2 guidance before it was released in 2015, but they had reservations about the final product.
According to supporters, the standard has encouraged more companies to commit to clean-energy targets, which has prompted utilities to build more solar and wind projects and governments to create policies that encourage their development.
"What companies are doing is sending a very clear market signal," said Sam Kimmins, CEO of RE100, a group of companies that have pledged to use only renewable energy. Apple, AstraZeneca, and General Motors Co. are among the nearly 360 members of the RE100.
William Gore-Randall, a director at Lazard Asset Management in London, said he became skeptical after learning how cheap financial instruments like RECs are, allowing companies to declare large reductions in emissions on the cheap.
"Companies are putting lip service behind it but not money behind it," he said.
More companies, including Apple and Salesforce.com Inc., have stated that they are attempting to contract from new green-power projects that they helped finance in order to ensure that their renewable-energy purchases actually reduce emissions. Companies such as Microsoft Corp. and Alphabet Inc.'s Google have stated that they are testing methods for more accurately matching renewable-energy purchases with hourly power consumption.
Although Salesforce claims to have achieved 100 percent renewable energy for its operations using the current standard, the company has set tougher greenhouse-gas reduction targets for 2030 that include total emissions on the grids in which it operates, according to Max Scher, who heads Salesforce's clean energy and carbon programs.
The world is counting on large corporations to significantly increase the amount of renewable energy produced over the next decade, he added. "There's a world in which...we get [to 2030] and the physical reality of the grid hasn't changed very much," Mr. Scher said of the current scope 2 accounting standard.