Mitsubishi Research Institute, Inc. Submits Opinion on New GHG Protocol Reporting Framework

Mitsubishi Research Institute, Inc. (President and CEO: Kenji Yabuta, hereinafter referred to as MRI) has submitted its views as an opinion in response to the request for comments on the Actions and Market Instruments (AMI) Phase 1 White Paper conducted by the GHG Protocol. The opinion summarizes MRI's perspective on how to demonstrate the use of low-carbon products and market instruments in GHG accounting and reporting, based on the practicalities of GHG calculation for Japanese companies and their efforts towards decarbonization management.

1. Background

The GHG Protocol, an international standard for calculating greenhouse gas (GHG) emissions, is currently undergoing a review of its rules for corporate emissions calculation and reporting. Actions and Market Instruments (AMI) is being considered as part of this process. AMI refers to a new framework for organizing the treatment of investments in reductions/removals, procurement of low-carbon products, utilization of market instruments such as certificates and credits, and evaluation of avoided emissions, which are not directly reflected in a company's physical GHG inventory (a compiled and organized list of GHG emissions).

Discussions are moving towards a direction where various corporate contributions to decarbonization are understood and reported in separate statements, differing from the traditional reporting system centered on physical GHG inventories.

The AMI Phase 1 White Paper, which summarizes the results of previous deliberations, proposes a "multi-statement" GHG reporting structure*1 that includes a market-based GHG inventory, GHG impact statement, and non-GHG indicators, while maintaining the traditional physical GHG inventory as its foundation. The GHG Protocol's Request for Information (RFI)*2 on this White Paper was conducted from March 31 to June 15, and the results are expected to be reflected in future deliberations on AMI standards and guidance drafts. Subsequently, a public consultation on the formal draft standards is scheduled for the third quarter of 2027.

2. Discussion Points for AMI and Key Points in the AMI Phase 1 White Paper

Two notable discussion points in AMI are the potential expansion of the market-based approach, which has primarily been used for Scope 2*3, to Scope 1*3 and Scope 3*3, and the consideration of a framework for reporting contributions to reductions and avoided emissions separately from the physical GHG inventory. These are important points related to how companies position their procurement and provision of low-carbon products/services and their use of market instruments within their decarbonization strategies, and how they demonstrate their contributions to decarbonization beyond their own emission reductions.

Furthermore, a key point of discussion is how to transparently and consistently calculate and report the effects of decarbonization actions and market instruments that cannot be fully captured by a company's physical GHG emissions inventory alone.

The White Paper considers a reporting structure that includes the following four statements:

Physical GHG Inventory: Traditional physical GHG inventory centered on Scope 1, Scope 2, and Scope 3.

Market-Based GHG Inventory: Inventory demonstrating the effects of procurement and market choices based on contracts, certificates, etc.

GHG Impact Statement: Statement showing impacts such as reductions, removals, avoided emissions, and credits using consequential methods.

Non-GHG Indicators: Statement showing indicators other than CO2e, such as the ratio of low-carbon products, investment amounts, and procurement amounts.

Figure 1: Proposed New GHG Reporting Structure (Multi-Statement Approach)

Source: Prepared by Mitsubishi Research Institute, Inc. based on GHG Protocol's "Actions and Market Instruments White Paper (AMI White Paper) v3"

3. MRI's Views

While MRI believes that such a multi-statement approach is useful for visualizing corporate decarbonization actions and the effects of market instruments, it also recognizes the potential to undermine comparability between companies and the reliability of reporting if the calculation methods, quality standards, relationships between statements, prevention of double counting, and alignment with target setting are not clearly defined. From the perspective of ensuring the reliability and comparability of the system, the following opinions were submitted:

Figure 2: Content of Submitted Opinions (Excerpt)

Item

Content of Opinion

Market-Based

GHG Inventory

When extending to Scope 1 and 3, it is important to prevent double counting, consider conditions for attribute transfer, and clarify the boundaries with the physical inventory in Statement 1.

GHG Impact Statement

In particular, avoided emissions from products, etc., need to be handled with caution, taking into account previous discussions on carbon credits regarding baseline scenarios, additionality, permanence, transparency of calculation methods, and prevention of double counting. Furthermore, the treatment of credits and certificates should be separated, and their positioning clarified, such as whether credits are treated as impacts or as something other than Scope 1, 2, or 3 in the market-based approach.

Non-GHG Indicators

Non-GHG indicators are useful as supplementary information to demonstrate actions and investments towards decarbonization. However, since appropriate indicators vary by sector and region, it is desirable for AMI standards to provide general categories and concepts, leaving the specific definition of indicators to sector- and region-specific initiatives.

Optional vs. Mandatory

It is desirable that the GHG Impact Statement and Non-GHG Indicators be optional rather than mandatory at this time. This is because uniformly mandating new statements could excessively complicate reporting practices and increase the burden on companies.

Phase 2 Discussion Points

In Phase 2, it is important to clarify the relationship between the physical inventory/market-based inventory in AMI and the location-based/market-based approach in electricity, and to ensure consistency. Furthermore, it is desirable to have a consistent approach to the Chain of Custody (CoC)* for fuels.

* CoC (Chain of Custody): A model that shows how information regarding the environmental attributes of products and materials is transferred, tracked, and managed along the supply chain. In AMI, clarifying the relationship between the physical approach, contractual approach, and impact assessment is a key discussion point. The handling of the CoC model is also being considered in the revision of ISO 14067, and alignment with AMI is being sought.

Prepared by Mitsubishi Research Institute, Inc.

4. Future Plans

MRI has previously submitted opinions on the GHG Protocol revisions, including its opinion on the Scope 2 revision proposal and by publishing columns analyzing the impact of GHG Protocol revisions. MRI plans to continue to closely monitor the progress of GHG Protocol deliberations and organize the impact on GHG calculation practices and decarbonization management for Japanese companies.

Furthermore, by fully leveraging its expertise in the development and organization of calculation rules, MRI will work to support companies in their decarbonization management, decarbonization-related businesses, renewable energy policies, and the advancement of the low-carbon product market through research, consulting, and information dissemination.

Related Information

Mitsubishi Research Institute, Inc. Submits Opinion on GHG Protocol Scope 2 Revision Proposal (News Release, February 16, 2026)

https://www.mri.co.jp/news/press/20260216.html

Impact of GHG Protocol Revisions on Renewable Energy Procurement (Environment & Energy Topics, June 11, 2026)

https://www.mri.co.jp/knowledge/column/20260611.html

*1: Multi-statement GHG reporting: A structure that reports separately on market-based GHG inventories, GHG impact statements, non-GHG indicators, etc., in addition to the physical GHG inventory. The AMI White Paper considers enhancing transparency by separating information with different calculation methods and purposes.

*2: RFI (Request for Information): A process to solicit information and opinions from stakeholders on points under consideration, prior to the public consultation on the formal draft standards.

*3: Scope 1-3: GHG emissions are organized and reported based on the following definitions:

Scope 1: Direct emissions from facilities owned or controlled by the company.

Scope 2: Indirect emissions associated with electricity, heat, etc., purchased and used by the company.

Scope 3: Indirect emissions across the entire supply chain, excluding Scope 1 and 2.